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The ASX 200 saw the best of the days gains in the morning with a high of 6915, the highest level in six weeks however sellers emerged and we ended around 30points below the session high.
Following the longest break of the year for the ASX, we’re tipped to open higher this morning as global markets break to new highs with a confluence of better economic data and news of further stimulus in the US last week creating a strong tailwind for risk assets. Last week saw the resumption of the trends that played out in 2020, namely outperformance by the growth / technology stocks and underperformance of value.
Last week wrapped up Q1 of 2021 with the local market adding 3% for the 3 months, not a great effort given the backdrop of US markets which were up closer to 8%. We continued to see the broad trading range play out on the S&P/ASX 200 roughly between 6500 & 6900. When a market trades in a consolidation range for a number of months, the longer it stays there the more significant the eventual breakout is when it happens, sort of like a spring getting compressed until the pressure is released and bang, it propels itself in one direction or another.
The market held on to gains today for what feels like a week long struggle against sellers that appear in the afternoon.
The first quarter of 2021 is behind us and after 3 extremely choppy months on the stock & sector level the ASX200 itself has managed to advance 3%, or an average of just 1% per month. The determining factor of sector performance year to date has been the sharp appreciation by longer dated bond yields as markets factor in a major post COVID economic recovery.
A positive session to round out the month and quarter for Aussie stocks, although there was a massive MOC (market on close) order that saw the ASX 200 fall 30 points in the match (between 4pm & 4.10pm).
The ASX200 has totally ignored some strong leads from global indices this week, on Monday morning a test of 6900 appeared imminent but the combination of Brisbane’s lockdown and fears around JobKeeper ending today has sent the local index down closer to 6700 come Tuesdays final bell. – as can be seen on the chart below we’re back at the mid-point of 2021, yet again. The selling yesterday was noticeably broad based with almost 85% of the ASX200 closing in the red, notably the Telco’s were the only sector which managed to close in positive territory as Telstra (TLS) continued to firm.
The Match Out: Stocks lower as Brisbane heads for longer lock down, AGL to split, TLS upgraded again
News that Brisbane is likely to go into a longer lockdown as the UK variant of the virus claims cases in the sunshine state has seen stocks sold off today as consistent selling from the open pushed the local market down nearly 100pts from the early session highs. A Byron Bay hens party seems to be the catalyst with the entertainment bringing more than was bargained for just as support from Job Keeper rolls off. Australia was a clear under performer from a regional perspective today as the material sector provided the biggest weight on the market overall.
Yesterday morning we saw Brisbane go into a snap 3-day lock down as fears the UK strain of COVID was about to explode through the capital of the Sunshine State, undoubtedly plenty of Easter holidays have been thrown into disarray by this one press conference.
The ASX lost ground today, selling off from early strength. The Brisbane lockdown kept the bulls at bay with rising case numbers coinciding with job keeper support rolling off.
