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The ASX200 surrendered early solid gains yesterday as it took direction from the US futures slow meander lower, we finally ended the day down just 0.2%. Overall when compared to the last few weeks it felt like a pretty quiet session with a +2.5% gain by the Tech Sector the main standout on the day while the banks experienced a rare day in the red, less than 3% of the main index moving by over 5% told the tale of the day. Basically after surging +5.5% over just 9 sessions the market needed a well-earned rest and it took one!
A disappointing session today with early strength fading throughout the day. The index was at one stage up 56pts/+0.77% to 7350, the highest level in a month before falling a total of 72pts and closing on the low of the day. Tech was a surprise star in the with most holding up well throughout the session managing to build on the momentum from last week. The resource sectors were also in the black on a softer day thanks to support in commodity markets.
Last week saw risk assets enjoy their best 5-days since 2020 as ongoing bad news from a number of corners was dismissed as largely irrelevant by equities, especially post the Feds rate hike. The ASX200 closed up an impressive 3.3% and we believe there’s a very good chance that a test of all-time highs is in the offing – it’s now less than 5% away. The only real laggards last week were the resources and if they can just take a rest on the downside the tech / growth sector feels poised to drag the market higher, as we keep saying the path of most pain is up:
The ASX200 shrugged off a number of headwinds last week including a Fed rate hike, hawkish comments from Jerome Powell, rising COVID numbers, a decent pullback in commodities and ongoing geopolitical worries surrounding Russia’s invasion of the Ukraine conflict including concerns that China will eventually mover to support Putin. Local stocks simply wanted to rally and nothing was going to stand in their way with the main index eventually closing up 231-points / 3.3%. MM continues to beat the same drum and importantly the rhythms playing out:
The local bourse was choppy early on today before finding its feet around lunch to rally into the weekend, though some risk was taken off near the close before a strong match saw it close on the day’s high. Strength across the commodity index overnight helped support the local market while the rebound in tech continued. Equities were unfazed by the Bank of England hiking rates to 0.75%, as was expected, tracking higher on the back of China’s support for a stronger market.
The ASX200 rallied strongly yesterday to close up +1.1% enjoying further broad-based buying which saw 75% of the index close in positive territory for the day as we closed above the last 3-weeks high. Similar to US indices the ASX enjoyed some strong buying in the IT stocks following the Feds rate hike and hawkish comments which illustrated how crowded the anti-growth stance had become at the start of the week, remember the statistics we recently quoted from the Bank of America Fund Managers Survey:
A bullish session for the ASX today, the 2nd on the trot with some aggressive buying targeting the IT stocks following in the footsteps of the overnight move. Higher rates are meant to be a negative for Tech as we’ve so often written, however markets are forward looking and rate hikes had already been priced in, the certainty of the move underpinning a relief rally.
The ASX200 rallied strongly yesterday to close +1.1% on broad based buying and importantly an absence of meaningful selling – even the embattled Mining & Energy sectors reversed early loses to close marginally higher. However its was the tech names that finally performed the heavy lifting for the ASX with over 90% of the stock’s closing up on the day, assisting the sector post a healthy +3.3% gain. MM has been looking for the growth stocks to recover some of their recent declines, perhaps its will be a classic case of “sell the rumour & buy the fact” after the Feds interest rate decision this morning.
A solid session for the Australian market today led by a bounce back in the IT sector with over 75% of the market finishing up on the day, the real test will come tomorrow to see if we can string two positive sessions together with the added complication of the US Fed meeting in the morning our time – consensus is for a 25bps increase in US interest rates.
The ASX200 fell 0.7% yesterday under the weight of aggressive selling across the resources sector, almost the complete opposite to how equities kicked off last week e.g. Tuesday saw Santos (STO) -4.1%, IGO Ltd (IGO) -6.8%, BHP Group (BHP) -4.2% and OZ Minerals (OZL) -3.5%. Fortunately the banks maintained their recent strength to limit the losses as the Big Four managed to collectively rally over 1%.
