Healthcare companies were in the firing line on Friday, with Resmed (down 1.7 per cent), Ramsay (down 1.7 per cent) and Fisher & Paykel Healthcare (down 6.3 per cent) all falling. Fisher & Paykel reported a 34 per cent slump in its net profit for the 2023 financial year.

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REITs (down 0.7 per cent) also weighed the index with Magellan (down 1.7 per cent), Vicinity Centres (down 1 per cent) and Goodman Group (down 0.6 per cent) declining.

Energy companies (down 0.5 per cent) slipped as coal miners and oil producers dropped. Whitehaven (down 1.7 per cent) and Yancoal (down 0.6 per cent) were among the biggest large-cap decliners.

Heavyweights Woodside (down 0.1 per cent) and Santos (down 0.4 per cent) also edged down after Russian Deputy Prime Minister Alexander Novak played down the possibility of further OPEC+ oil production cuts ahead of the organisation’s meeting next week. Brent crude futures fell 2.7 per cent to $US76.25 on the news.

The lowdown

TMS Capital portfolio manager Ben Clark said Wall Street provided a positive lead for the Australian sharemarket and that investors seemed to be getting a bigger appetite for risk.

“Growth stocks seem to be back in favour again,” he said. “There’s been a flow-on from what we’ve seen in the US. Technology and platform businesses have seen strong gains this week, and it feels like it’s being funded from a rotation out of defensive parts of the economy.”

Clark said this was partly a reversal of recent trends where investors over-allocated to some parts of the market. “Some of the growth businesses became so under-owned last year,” he said. “There were businesses that were still doing quite well, but they got hammered and became very cheap.”

Healthcare companies fall into a middle ground between growth and defensive stocks, Clark said. Shares in Fisher & Paykel plunged on Friday, but Clark said it was likely a knee-jerk reaction.

“Fisher & Paykel has gone through a very strange few years,” he said. “They are the largest producer of respirators in Australia, so they had a full-blown boom in business. But they had some supply chain issues and a lot of hospitals probably over-ordered, so the company went through a bizarre sell-off.”

Elsewhere, Wall Street’s building frenzy around artificial intelligence helped yank the stock market higher on Thursday, even as worries worsened about political rancour in Washington.

The S&P 500 rallied 0.9 per cent after chipmaker Nvidia gave a monster forecast for sales as it benefits from the tech world’s rush into AI. It helped the Nasdaq composite leap 1.7 per cent, while the Dow Jones slipped 35 points, or 0.1 per cent.

Because it’s one of Wall Street’s most valuable stocks, Nvidia’s 24.4 per cent surge was the strongest force pushing upwards on the S&P 500. Its forecast of roughly $US11 billion ($16.9 billion) in revenue for the current quarter blew past analysts’ expectations for less than $US7.2 billion. Nvidia’s stock has already more than doubled this year, and its total value is approaching $US1 trillion.

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Stocks of other chipmakers also charged higher after Nvidia described a race by its customers to put AI “into every product, service and business process”. Advanced Micro Devices gained 11.2 per cent.

Some big tech stocks rallied, adding to recent gains fuelled by excitement about AI. The field has become so hot that critics warn of a possible bubble, while supporters say it could be the latest revolution to reshape the global economy. Microsoft gained 3.8 per cent and Google’s parent company, Alphabet, rose 2.1 per cent.

They helped lift indexes even as the majority of stocks fell on worries about the US government edging closer to a possible default on its debt. Washington could run out of cash to pay its bills as soon as next week, unless Congress allows it to borrow more.

The widespread expectation on Wall Street has been for Washington to reach a deal before it’s too late, as it has many times before, as a failure would likely be awful for the economy. But bitter partisanship on Capitol Hill is hurting faith and trust in the government.

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Fitch said late on Wednesday that it could downgrade the US government’s AAA credit rating. It said it still expected a resolution before the US Treasury ran out of cash, but it saw the risk of a mistake having risen.

“The brinkmanship over the debt ceiling, failure of the US authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to US creditworthiness,” Fitch said.

In 2011, Standard & Poor’s cut its AAA credit rating for the United States following a similar political squabble about the debt limit.

One report said fewer workers applied for unemployment benefits last week than expected. That’s a signal the job market remains remarkably solid, even as manufacturing and other areas of the economy slow under the weight of much higher interest rates.

Another report estimated the US economy grew at a 1.3 per cent annual pace in the first three months of the year, stronger than the 1.1 per cent earlier expected. That report also suggested inflation was a touch hotter during the start of 2023.

The stronger than expected data helped dampen investors’ fears about a coming recession. But it could also convince the Federal Reserve to raise interest rates again next month. Traders are split on whether the Fed will take a pause in June after increasing rates at a furious pace for more than a year.

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“Our stores won’t be the prettiest stores in history [but] they will be the cheapest by far,” said the chief executive of discount supermarket NQR, Ewan Jones, as Australia’s grocery operators jostle to provide value to households being squeezed by cost-of-living pressures.

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With AP