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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%.
The holding pattern continues for the market with the ASX giving back ~50% of yesterdays rally. With little clarity in negotiations between Russia and Ukraine, the Federal Reserve meeting in the US on Thursday morning our time (25bps rate hike expected), the growing COVID situation in China and rumblings around whether or not China is going to / has already helped Russia, it’s easy to see why things are subdued, it actually feels more resilient than anything given the shopping list of risk factors that one can point to.
The ASX200 rallied strongly yesterday to close +1.2% with exactly 80% of the market closing up on the day, the Financials were again the standout rallying +2.5% while the resources continued to look a touch tired although not down and out at this stage. Historically the banks simply love this time of year with 3 of the “Big Four” trading ex-dividend over the coming weeks however its this exact same seasonal strong rally by the sector which often bears fruit to the “sell in May & go away” trade for the ASX , to be precise just before the end of April is when the ASX usually gets the…
The market continued its trend of being a choppy mess, today rallying by +1.3% after falling on Friday by a similar amount. The influentiual banks were strong pushing the broader financial sector +2.46% higher while the Materials look tired after a cracking run of late, today falling -0.34% to be the only sector in the red. We posed the question in this mornings Macro Monday report, Has Russia created a blow off-off top in commodities? Click here to read.
While the awful humanitarian news continues to flow out of the Ukraine last week saw financial markets focus on the potential risks towards commodities markets and by definition global inflation if we see a prolonged conflict / economic stalemate. History tells us that higher inflation leads to rising interest rates which is a significant headwind for equities, and risk assets generally. Petrol prices have already gone crazy in Sydney, the local station has standard 95 at $2.35, I remember back in the middle of the Coronavirus panic it actually dipped under $1, that’s a clear read on inflation. We’ve all heard how commodity prices…
The ASX200 experienced a very mixed week depending which stocks / sectors investors held although again the index traded in a tight range ultimately closing down less than 1%. Following some panic moves across commodity markets we saw some aggressive profit taking in the space later in the week but fortunately, for the health of the local index, we saw the hugely influential Financial Sector rally 2.2% noticeably outperforming the Materials Index which finally ended the week down 3.4%. Some of the recent volatility in the commodities space is almost beyond panic and comprehension, even considering the war in the Ukraine:
A poor session to end the week with the market giving back most of yesterday’s gains – it sort of just felt like everyone lost interest after a busy week with volumes light and no impetus to step up and buy anything ahead of the weekend. For the week the ASX was only marginally lower, but under the hood, it was a different story, the two heavyweight sectors being the Materials -3.44% versus the Financials +2.20% on either end of the performance spectrum.
The ASX200 rallied strongly yesterday to close up 1.1% with over 80% of the market closing up on the day, if it hadn’t been for some profit taking in the energy & mining stocks it would have undoubtedly been a rare triple digit gain for the local index. Much of the strength flowed down from a pullback in oil prices following comments from the Ukraine that’s it’s open to peace talks with Russia, travel stocks were not surprisingly the standout winners e.g. Qantas (QAN) +5.8%, Webjet (WEB) +5.8% & Fight Centre (FLT) +6.6%.
A bullish session for the market today with buyers emerging following a pullback in energy & material prices overnight. The IT stocks built on yesterday’s bounce to lead the line however there was support right across the industrial and financial sectors, while energy & materials gave back some recent gains. In terms of index contribution, the big 4 banks added ~34 pts while BHP, RIO & FMG took ~30 pts off.
