ASX 200 storms 1.9% higher in third-biggest daily gain of 2022

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Highlights

  • ASX 200 stormed 1.9% higher to 7,075.1 in the third-biggest daily gain this year.
  • Every sector closed in positive territory; tech sector led the rebound with a 7% rise.
  • Fears of a global recession induced by aggressive central bank tightening, a war in Ukraine and slowing activity in China are impacting global markets.

For much of 2022, world markets have been volatile owing to China's Covid-19 lockdowns, Russia's invasion of Ukraine, and surging inflation weighing on consumer sentiment.

Another volatile week for global share markets just ended. Indexes witnessed sharp swings from one day to the next, or within a single day. Investors seem to be trying to shield their investment portfolios from the impact of the highest inflation in decades and rising interest rates as central banks take moves to tame surging prices. Sinusoidal trends are likely to continue and what one can do is think long-term, maintain a strong temperament, and not let fear or greed impact investment decisions.

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How did ASX 200 perform?

Yesterday, after a hotter than expected US inflation report, Australian shares fell 1.8%. The benchmark dropped to its lowest in three and a half months. Overnight, the Australian dollar dropped as far as US68.29¢, its lowest since mid-2020.

Today, trading sentiment at the local market was positive after Federal Reserve Chair Jerome Powell again pushed back against speculation of more aggressive interest-rate hikes.

In early trade today, Australian shares shot up 1.2%. All eleven categories of the index rose. With a few minutes of trading left, the ASX was on track for its second-biggest daily gain this year.

Eventually, the ASX 200 stormed 1.9% higher, gaining 134.10 points to 7,075.1- its third-biggest daily gain this year. However, it ended the week 1.8% lower. Over the last five days, the index has lost 1.81% and sits 4.69% above its 52-week low.

On the sectoral front, all eleven sectors ended higher. Information technology was the best performing sector, gaining +6.95% and rebounding from its recent decline. This sector is off -6.66% for the past five days.

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Who gained? Who lost?

The top performer today was Life360 (ASX:360), up over 14%. It was followed by Polynovo Limited (ASX:PNV) and CLINUVEL Pharmaceuticals (ASX:CUV). CLINUVEL today announced its fourth Strategic Update, focused on the Group’s view to establish a sustainable group of companies. Other gainers of the day were Tyro Payments (ASX:TYR) and Codan Limited (ASX:CDA).

On the other side, in the red zone of the ASX 200, IGO Limited (ASX:IGO) was the biggest laggard, its stock down over 3%. Other stocks in this zone were Reece Limited (ASX:REH), Gold Road Resources (ASX:GOR), Domino’s Pizza Enterprises (ASX:DMP) and Graincorp (ASX:GNC).

Why are these 3 ASX penny stocks shooting up today?

Asian and global market

A bout of calm in global markets was noticed today after hints that the Fed is likely to raise rates by a half point at each of its next two meetings and isn’t “actively considering” a 75 basis-point move.

Japan, China, and Hong Kong helped an Asian share gauge climb 1%. The Nikkei was up 2.6%, Japan’s Topix index climbed 1.7%, South Korea’s Kospi index increased 1.6%, China’s Shanghai Composite index rose 0.5%, and Hong Kong’s Hang Seng index added 1.4%.

Overnight, US stocks ended a volatile session slightly lower. The Dow Jones Industrial Average fell 0.33%, the Nasdaq Composite added 0.06% and the S&P 500 fell 0.1%.


 


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