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The ASX200 finished a choppy session on Wednesday down just -0.1%, with over 65% of the main board ending lower. However, another solid session by the resources, particularly energy names, was enough to stem the losses. Escalation of the Middle East conflict set the tone early in the morning, but buying in the likes of Beach Energy (BPT) +4.6% and Woodside (WDS) +3.1% almost offset general selling on concerns after Israel vowed to retaliate against Iran for its missile attack – the regions on a knife edge
The majority of stocks ended lower today as concern around tensions in the Middle East weighed, though selling was only tepid and there were pockets of strength, largely from energy and resources stocks offset by weakness across Technology. A fairly lacklustre session, void of any real news, so a short note this afternoon!
The ASX200 slipped 0.7% on Tuesday during a rare session that saw the banks and resources close lower. The economic news was net positive, reaffirming the RBA’s tough stance towards interest rates, but it’s becoming an increasingly polarised economy
With China off on Golden Week holiday, there was a void of any positive policy news from the region and with the start of a new quarter, it wasn’t surprising to see some weakness creep into the market, the index giving back the gain it put on yesterday with both the miners & banks attracting sellers.
China has been a major buyer of gold as investors searched for an alternative to a plummeting property and stock market and a hedge against the Yuan. However, the last week has mitigated many of the fears weighing on Chinese investors over recent times.
A positive session to cap off a strong month for local equities underpinned by a policy pivot in China; the ASX200 rallied 3.24% inclusive of dividends, about 2x the return achieved by US stocks in $US terms, though when both are priced in AUD, the local outperformance was significant.
Last week, Beijing pressed the “whatever it takes button” to jumpstart their struggling economy that’s currently on course to miss its annual GDP growth target of ~5%. Financial markets across the world stood back and took notice, with the Shanghai Composite surging to a three-month high
Last week, the AX200 edged up just +0.03%, but on the stock and sector level, it was anything but a quiet five days for local equities. The Materials Sector soared +9.4% while the financials fell 4.4% as major economic stimulus out of Beijing ignited optimism that the PBOC can reinvigorate the world’s 2nd largest economy; the banks, after their impressive gains through 2024, were used as a funding vehicle. Also, we shouldn’t forget the extreme market overcrowded positioning, which led to last week’s aggressive performance reversion plus, of course, Beijing’s new “whatever it takes” approach
An extraordinary week comes to an end with significant divergence playing out across the market, the Material sector was up over 9% against the Financials that were down ~4.5%. We often say the market can’t go up without the banks, and a flat week at the index level supports that call, but geez, with a move like we saw in resources it went close to blowing that claim out of the water.
The ASX200 surged +0.95% on Thursday, with broad-based buying propelling the local index back above the psychological 8200 level. Over 85% of stocks in the major index advanced, while 10 of the 11 sectors finished in the green, with the banks again the main drag from a points perspective.
