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The ASX200 fell -0.7% on Wednesday, with volatility resurfacing in a session that saw stocks falling alongside gold and cryptocurrencies. . It was a day in which assets favoured by retail momentum traders bore the worst losses, among them precious metals, crypto and companies in the artificial-intelligence space.
Stocks slipped back from record highs today as the spectacular rally in precious metals came unstuck, sending gold tumbling by the most in more than a decade. Rare Earth stocks also pulled back after a strong period- profit taking swept across the sector, while Uranium stocks and broader commodities were also knocked lower.
The ASX200 continued to advance in a “three steps forward, two back” fashion on Tuesday, posting a new all-time high before fading into the close. Gains were broad-based, with over 60% of the main board rising and 10 out of the 11 main sectors, with only the defensive facing consumer staples slipping lower.
The ASX set new intraday and closing all-time highs for the second time in less than a week today powered by surging miners and renewed enthusiasm for the critical minerals sector following a landmark Australia–US funding deal.
The ASX 200 recovered stoically from early weakness to finish up +0.4% on Monday, supported by the banks and insurers, while the resources names experienced a rare day in the “naughty corner”. Commonwealth Bank (CBA) surged more than 2% to $172.70, leading the “Big Four” higher and helping the financials sector to its highest-ever close at a combined value of almost $950 billion.
The ASX looked tired at the end of last week, with rising volatility across asset classes, and some reasonable selling of previously hot stocks & sectors – but despite opening lower, the bulls quickly regained control, inline with a positive move across US Futures, sending the index +68pts up from the early lows, led by the financials.
The start of the U.S. earnings season has revealed a potential fault line in the market’s strong rally and lofty valuations, with rising risks from aggressive lending at some regional banks. The small caps have been on song recently, but the regional banks have called into question their strong run after turning lower year-to-date.
The ASX200 ended the week up +0.4% but it looked so much stronger into lunch on Thursday, with the index pushing through 9100 for the first time in its history after soft local employment data lifted the market’s hopes for a rate cut on Melbourne Cup Day. However, the broad market struggled on Thursday afternoon and especially on Friday, with the gold stocks the main reason we didn’t finish the week in negative territory as the precious metals continued to march ever higher. Monday is poised to deliver some major reversion with many stocks that struggled last week likely to enjoy a bid, and vice versa.
The ASX fell away into the weekend trading steadily lower throughout the day to close near its intra-day lows. Weakness in US futures and European futures and Asian indices didn’t help sentiment where “risk off” was the theme of the day. Only the safe haven of gold seemed to hold any meaningful attraction to investors.
The ASX 200 enjoyed a surprisingly strong Thursday, after a lacklustre start to the day. Aggressive buying pushed the market above 9100 for the first time before surrendering some of the day’s gains through the afternoon to close up +0.9%.
