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The market tracked lower again today however the selling is far from aggressive – it’s more a trickle lower on lack of interest rather than anything more bearish at this stage.
The ASX200 slipped lower on Monday failing to take any cheer from a strong end to last week by overseas markets, the session felt like a drift lower on lack of interest with less than 30% of stocks managing to close in positive territory. With the exception of some solid gains by the iron ore names, following a strong session by the bulk commodity, nothing particularly caught our attention on a day where a disappointing 10 out of 11 of the market sectors closed lower.
A quieter start to a big week with the ASX oscillating around par for most of the session, around 65% of the market closing lower today and only one lone sector (materials) finishing in the black.
Last week saw the ASX200 close basically unchanged although it was fairly choppy from a day to day perspective but with Healthcare stocks picking up the slack in IT and Energy the net result to the index was extremely small. Stock / sector rotation continues to dominate the Australian market as we approach the infamous May – the phrase “sell in May & go away” is founded on hard seasonal facts – over the last decade, while the market was rallying, the average return for May was -3% and June -1.7%.
The ASX200 continues to enjoy April with the index currently up 4% for the month, it closed on Friday less than 2% below its 2020 all-time high. We are still looking for a decent pullback / period of consolidation from current levels but the current optimism is shrugging off any bad news that crosses the wires hence MM is not going out on a limb and saying a meaningful top is imminent just that the that risk/ reward advocates a degree of caution.
Volatility kicked up this week with weakness early on overcome by strength late, overall though the market was very little changed in aggregate which is a good result.
The ASX200 rallied strongly on Thursday after a fairly lacklustre start ultimately posting a solid +0.8% gain taking the market to within striking distance of its 2021 high. Gains were again broad based with almost 70% of the market closing up while heavyweights Commonwealth Bank (CBA), CSL Ltd (CSL) and BHP Group (BHP) all outperformed on the day.
The market built on its ~90pt turnaround from yesterday’s low to add another ~57 points today as the sellers all but disappeared, giving way to some impressive moves, particularly in stocks that have struggled in recent times.
The ASX200 only closed down -0.3% yesterday after recovering well over 80% of the losses registered at lunchtime – it picked the US market well again.
A weak session for the ASX today as the market pulled back from recent highs, the IT & Energy sectors i.e. the growth / risk related areas were the weakest while we actually saw a number of sectors end the session higher.
