Woodside drags the market below back 6000 (WPL, QAN, JBH)
The pullback continued today as the market followed the overnight leads, opening lower and staying lower. Buyers failed to support the market today, which has been rare in recent times, and the market closed just off its lows. Broad-based selling hit most stocks/sectors today, energy was the worst hit sector today, reasons for which we will talk about later, while Tech was the only sector to finish higher, adding 1.4% today driven by positive commentary out of Computershare’s AGM. Overall today, a range of +/- 46 points, a high of 6013, a low of 5957 and a close of 5968, down 53pts or -0.88%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
The energy names in particular struggled today after Shell sold it’s $3.5 billion stake in Woodside (WPL) at a considerable discount, pushing the shares down 3.2% for the day. Shell’s stake was taken by institutional investors who clearly took to the market today, selling across the board in order to fund the new allocation as was foretold in the morning report. We have been looking for a way back into the energy market since our sale of Santos a few weeks ago, and this weakness presented a great opportunity to get back on board, and a great left field pick for the income portfolio, paying 4.49% FF.
Woodside (WPL) Daily Chart
Qantas (QAN) fell to a near 7 week low after the announcement that the flying kangaroo will be dropped from the MSCI index. This is not necessarily a negative on the stock, only a short term drag as it falls off the list of holdings for a number of active and passive funds.
Qantas (QAN) Daily Chart
Retailers were also hit hard after Amazon announced they were near launch in Australia yesterday. This is a big overhang on both retail and landlord stocks in the current market, however we remain comfortable with our holdings in the both sectors within the income portfolio due to a range of stock specific reasons. JB Hi-Fi was the worst hit, falling 2.6%.
JB Hi-Fi (JBH) Daily Chart
Have a great night
The Market Matters Team
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