The ASX200 finished the shortened Easter week up +4.4%, closing within 2.6% of this year’s all-time high. The writing was on the wall in the previous week as global equities extended their recent bounce, and in many cases rallying right into the Easter break showing no fear of what might unfold when markets were closed for 3-4 days. This week’s obvious catalyst was the last minute ceasefire announced on Wednesday morning AEST but the local market had already shown the path of least resistance, recovering ~6% from its March low before the news broke.
April has seen a sharp turnaround for equities as war-related fears fade, with heavyweight banks and miners powering the market higher, both already up over +8% month-to-date, just a third of the way into the historically strong month. The winners enclosure so far this month is being dominated by the miners while the losers enclosure contains stocks hit by earnings downgrades, profit taking in the energy names and a sprinkle of software stocks suffering from ongoing “AI Disruption” fears.
Winners: Guzman Y Gomez (ASX:GYG) +29.3%, Great Resources (ASX:GGP) +28.2%, IperionX Ltd (ASX:IPX) +27.4%, Bellevue Gold (ASX:BGL) +21.5%, Northern Star (ASX:NST) +20.2%, Zip Co (ASX:ZIP) +19%, and Capstone Copper (ASX:CSC) +18.34%.
Losers: Pexa Group (ASX:PXA) -22.8%, Orora (ASX:ORA) -21.2%, Yancoal (ASX:YAL), Whitehaven Coal (ASX:WHC) -12.2%, DroneShield (ASX:DRO) -8.9%, Megaport (ASX:MP1) -7.5%, Woodside (ASX:WDS) -5%, and Xero ASX:XRO) -4.9%.
Weekly snapshot: The market remained focused on developments in Iran, but it slowly became less important as buyers returned in earnest to stocks:
- The ASX started the week in positive fashion on Tuesday surging +150-points driven by hopes the Iran War would ultimately de-escalate, with markets increasingly conditioned to expect last-minute diplomatic solutions.
- On Wednesday, after the ceasefire was announced the market added another +220-points despite the energy sector’s sharp drop, as tech and mining stocks led the day’s gains.
- The market had its wings clipped on Thursday by a tech sector under renewed pressure from potential AI disruption, however it still managed to advance ~20-points.
- The ASX ended the week consolidating gains and the more time its spends around the 9000 level the more bullish the picture in our opinion.
MM maintained a bullish bias through March, expecting the ASX to be higher on June 30th and at Christmas, although the war-induced correction has been more aggressive than we expected. With the index set to open around ~9000 on Monday we may see the market take a rest with ongoing uncertainty still percolating in the Middle East, but we can easily see the bourse testing 9500 later this year, and potentially higher.
Overseas markets closed the week in mixed fashion after enjoying a strong renaissance post the ceasefire announcement. The German DAX closed flat while the French CAC eked out a +0.2% gain. In the US, the S&P 500 slipped -0.1% but still posted its best week since November while the Nasdaq edged +0.35% higher, supported by strength in key semiconductor names including Nvidia and Broadcom.
- The SPI Futures are calling the ASX200 to open up +0.6% on Monday, following a strong session by the miners on Wall Street.
