HomeReportsMarket Matters Weekend Report – looking for opportunity…
The ASX200 keeps climbing the wall of worry, the 6700 magnet is threatening to pass its mantle onto the new 6800 handle and on Friday we closed less than 6% below 2020’s all-time high. The rate of ascent has diminished as the buyer’s appetite for different stocks / sectors rotates almost daily while the underlying index sets its sights on 7000, but it appears in no hurry to reach the next major psychological level. Already in 2021 while the index has ground out a ~3% gain we’ve seen 27 stocks rally by over 8% and 15 stocks fall by the same degree with some interesting names on both sides of the respective ledger:
The ASX200 finished the week down -0.2%, snapping a 3-week winning streak as it failed to embrace the strength across global indices. A +13% surge by the tech sector wasn't enough to offset losses by the influential banks, with the financial sector ending the week down -2.1%. Westpac set the tone early in the week, flagging that interest-rate volatility tied to the Iran conflict had hit its market’s income and prompted higher credit provisions. While not unexpected given rising rates, cost-of-living pressures and higher fuel prices, the update reinforced a cautious “if in doubt, get out” stance from investors ahead of May results from ANZ, NAB and Westpac
The ASX 200 slipped today, ending the session lower, awaiting further clarity on negotiations around the US-Iran ceasefire and the reopening of the Strait of Hormuz. The market snapped a three-week winning streak after the sharp rebound seen earlier in the month, though the pullback looks more like a period of consolidation rather than a meaningful shift in the broader trend.
For a third consecutive session, the ASX 200 opened strongly above 9000 before falling away throughout the day, dragged lower by the influential banks - it must be reading the MM report this week! Such is the hefty influence of the banks that, although over 60% of the main board closed higher on Thursday, an average drop by the “Big Four Banks” of over 2% was enough to drag the index down by 0.3%. Under the hood, the markets following the MM script so far this week.
The ASX wavered today as investors balanced improving global risk sentiment against fresh domestic data. The local market initially opened higher following record closes on Wall Street, but struggled to hold early gains as traders digested Australia’s latest labour market report.
The ASX200 again drifted lower after a strong open to finish Wednesday's session up just +0.1% - closing above the psychological 9000 level is proving tough after the recent strong run. The banks were again the main drag on the index, with the “Big Four Banks” all closing down on the day, with Westpac’s -1.9% fall the standout following their Tuesday update. On the sector level, the tech names outperformed for a change, gaining +2.4% while the energy names took the wooden spoon, slipping -1.9%.
The ASX looked set for a strong day early, but only finished marginally higher. We probably sound like a broken record at times – the ASX will struggle to push meaningfully higher without the banks leading, but today was the perfect example. The index briefly pushed above the 9,000 level intraday, though selling in financials capped the advance.
The ASX200 limped to a 45-point gain on Tuesday, after opening with a bang it surrendered more than 50% of its early gains as the banks came under pressure, courtesy of Westpac (ASX:WBC). From a points perspective it was very much a market of two halves with the two heavyweight market sectors pulling in opposing directions:
Today’s session kicked off with a strong open with the index pushing through the 9,000 level for the first time since early March before giving back some ground through the day, ultimately consolidating through the afternoon into the close.
We felt the ASX200 delivered a solid performance on Monday given the weekend's disappointing developments out of Pakistan around the US-Iran war, and the headwind of weakening global futures throughout our session.
The ASX finished lower today though the move was somewhat contained considering the escalation in rhetoric around the Middle East conflict. The local market entered the session digesting the breakdown of peace talks between the US and Iran in Pakistan over the weekend, with President Donald Trump announcing plans for a naval blockade of the Strait of Hormuz, causing a +7% spike in oil prices.
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