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The ASX 200 reversed from early steep losses to close up +0.2% on Monday, with a +1.7% bounce by the materials sector adding +35 points to the index, more than offsetting weakness in the financials.
The ASX staged a sharp intraday recovery, rallying ~85 points from its morning low to finish higher as technology, resources and property shares turned higher. The rebound followed early weakness as the market weighed the risk of higher interest rates against a busy week of Australian inflation data, US earnings and central bank decisions. Materials recovered some ground after last week’s selloff, while the major banks pared their early losses.
Relative sector performance is very often cyclical, depending on different factors such as bond yields and global economic growth. It may not feel like it, but the ASX 200 Financials and Materials sectors have delivered comparable gains since COVID, rising ~60% and ~50%, respectively, but they’ve followed very different paths.
The ASX 200 finished a volatile week, especially at the stock and sector level, with an 8% drop in the materials sector dragging down the broader market by just 0.1% despite almost 60% of the main boards closing higher. However, when we see heavyweight miners South32 (-11%), Sandfire (-10%), BHP Group (-8%), and RIO Tinto (-6%), it was always going to be tough for the index to advance.
The ASX spent most of the session trading lower off the back of a weaker session playing out in the US, particularly Tech overnight. Banks and consumer-facing stocks provided a lift, but the modest gain masked a sharp divide across the market.
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The ASX 200 recovered almost half of its early morning losses, but it still finished the day down 0.4% in a very polarised session. The damage on the index level was again inflicted by miners, with BHP on its own accounting for more than 60% of the index’s decline. Fortunately, the banks and broader market were again supportive, with the number of winners just managing to edge the losers despite the main board’s decline.
Local shares finished lower as higher oil prices and renewed rate-hike fears weighed on sentiment, with weakness across energy, materials, and consumer stocks. Despite a rebound in parts of the technology sector, concerns over data-centre funding and execution risks persisted, while a sharp retail profit warning underscored the pressure higher living costs and borrowing rates are placing on consumers.
The ASX 200 experienced a choppy Wednesday before rallying into the close, finishing the day up +0.2% – not a bad performance, with BHP Group (-1.6%) and NEXTDC (-42%) combining to take almost 26 points off the index. Fortunately, the banks provided a rare bright spot, with Morgan Stanley estimating that NAB’s planned cull of 2,500 roles could deliver annual cost savings of $400–500 million.
The ASX managed to finish slightly higher today after a topsy turvy session. Early gains were pared back after RBA deputy governor Andrew Hauser warned inflation was materially worse than forecast in August, pulling the index briefly back below the 8,800, level however a push through the afternoon led by the heavyweight Financials was enough to eke out a gain.
