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It was a directionless finish to the week with the market chopping in and out of positive territory throughout the day, but trading in a tight 40pts range. Resources stocks carried the index, stemming what would otherwise have been a soft finish to the week, or start to the new quarter. Growth was on the nose as tech, healthcare and consumer facing stocks softened.
We are buying PDN using a 73c limit price
Yesterday we waved goodbye to a volatile Q1 which saw the ASX200 initially drop -9.2% in January before slowly but surely recovering all of the losses before managing to end the quarter slightly higher. The highlight of the last 3-months would probably go to the explosive rise in bond yields but there were a few rivals for the mantle including surging commodity prices courtesy of Russia’s invasion of Ukraine and supply chain issues which stubbornly aren’t going away, the net result was a market of 2 halves, excuse the cliché, with value stocks like banks and resources rallying at the expense of growth names such as tech and healthcare.
End of month and end of quarter today and it’s been a challenging one to say the least with a raft of macro-economic landmines to navigate through however when the bell rang this PM, the ASX 200 had finished up +0.74% having traded in a big ~10% quarterly trading range. The Energy sector put on +25% in the March quarter, the IT stocks fell by -14% showing the two extremes, however there was a lot happening in between these outliers.
Wednesday saw the ASX200 continue its march towards new all-time highs finally closing up another 50-points, the index closed within 1.6% of its previous milestone set back in August of 2021. Gains were reasonably broad-based although we still saw over 30% of the index close in the red, the resources again weighed on the index while the growth related stocks were the standout winners e.g. Xero (XRO) +5.3%, Megaport (MP1) +7% and carsales.com (CAR) +3.5% – we are seeing a new trend emerge, if bond yields simply trade sideways then tech stocks extend their recovery. However the current “bounce” can be put into perspective when we consider how some of the individual…
A positive session for the market today as we approach the end of month and end of the quarter – a period that’s been extremely volatile with a raft of reasons for the market to be down, instead the rally continues for a 7th straight session, today it was IT stocks that led the line bouncing nearly 4% while Energy fell away on news of a de-escalation between Russia & Ukraine. The news cycle has been dominated by the Federal Budget which has been reasonably well received, some specific stock beneficiaries are discussed in our Weekly Market Matters Video Update below.
The ASX200 rallied another +0.7% on Tuesday taking the local index to within 2.3% of its 2021 all-time high – our call for a test of 7700-7800 through March & April is starting to feel almost conservative. Gains were broad-based yesterday with over 75% of stocks rallying, only the previously “hot” energy and resources stocks slipped lower while growth stocks regained their mojo with a small degree of gusto as bond yields took a rest, although there was no signs of them falling.
A strong session for the ASX today with most sectors in the green ahead of the budget tonight. Technology stocks followed their US counterparts higher while consumer discretionary names benefitted from chat that tonight’s budget will put more money in consumers’ pockets. US Futures were positive during our time zone which created a tailwind while Asia was also in the green. It doesn’t feel like it, but today’s advance was the 6th on the trot for the local market.
The ASX200 managed to hold on to small gains come 4pm on Monday after grinding lower from our midday highs approaching 7450, the index’s highest level since mid-January. The markets feeling a touch tired having already rallied +5.6% in March but although only 40% of the main index closed up yesterday when the banks and big miners are strong the ASX tends to follow suit e.g. Westpac (WBC) +1.2%, RIO Tinto Ltd (RIO) +1.4% and BHP Group (BHP) +2.3%. Its been this exact impressive performance from these 2 influential sectors…
The ASX lost some steam today, peaking up +52 points early only to taper off into the afternoon session, plus it was hit hard in ‘the match out’ between 4 & 4.10pm. That sort of trading action is indicative of a short-term top / pending consolidation which is easy to comprehend after the market has rallied nearly 9% from the January low sub 6900. The Material stocks best on ground today while the IT sector was buffeted from bond yields which continue to storm higher.
