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The ASX200 managed to eke out a slight 0.1% gain on Monday, with BHP’s 1.3% advance being the market’s backbone. It was a reasonably balanced affair on the sector level, with tech names advancing +2% while the rate-sensitive utilities and real estate stocks slipped over 0.5%. The main area of weakness was the energy sector, which declined 0.54%, which was not too bad considering that Paladin Energy (PDN) delivered a disappointing quarterly update and oil tumbled over 5% on easing tensions in the Middle East – more on this later.
A choppy session with some big moves in individual stocks though the index finished only mildly higher. Uranium shares were hit, as were gold stocks while lithium names found a few friends.
Donald Trump is the clear favourite for next week’s election. He’s now rated a ~60% chance of winning the White House, and markets are moving accordingly. As we said last week, the “Trump Trade” has returned with a vengeance, and the impact on bond yields is reverberating across all financial markets.
Last week was a choppy affair for the ASX200, dominated by Tuesdays sharp-sell off as bond yields rallied to 3-month highs with credit markets reducing the number of rate cuts they expect over the next year. The index finally closed down 0.87% on broad based selling with consumer staples +0.02% the only sector managing to eke out a gain while the tech sector took the wooden spoon retreating ~4%. On the stock level, except for a strong performance by the gold miners, it was another mixed bunch of winners & losers
A similar trend to yesterday with the best of the session seen early before consistent selling played out through the afternoon session, the index closing on its lows and down ~0.9% for the week.
The ASX200 slipped just 0.1% on Thursday, a good effort considering the Dow tumbled over 400-points after rising bonds yields weighed on stocks, and in particular the tech sector – overnight US mortgage rates rose for a fourth week to 6.54%. The banks were again the backbone of the local market with the “Big Four” rallying an average of 0.8%, with most of the group back within striking distance of their 2024 high.
A good ~40pt rally from the early lows saw the index higher by mid-afternoon, though the trend changed, sellers came in, and it was one way traffic into the close on another day dominated by AGM’s and trading updates with more misses than hits.
The ASX200 edged up +0.1% on Wednesday with the market trading in a fairly tight 36-point range. Large supermarkets Woolies and Coles helped the consumer staples to pole position, up 1.3% while tech took the wooden spoon slipping 1%, not helped by another down day for Richard Whites WiseTech (WTC) – more on this later.
A quiet day across the board with stocks closing mildly higher after a decent pullback yesterday. WiseTech (WTC) and MinRes (MIN) continue to attract the headlines while a raft of AGM’s & quarterlies kept us busy. Gold stocks in focus here with generally solid operational updates supported by a gold price at record highs.
The ASX200 came down to earth with a thud on Tuesday as rising bond yields finally took their toll on stocks. The local 3-year yield is up 0.5% over recent weeks, reducing the appeal of equities compared to bonds. Economic data at home and abroad has remained buoyant, lessening the need for significant rate cuts over the coming year.
