An Insight Into ASX 200 And Futures

  • May 06, 2019 AEST
  • Team Kalkine
An Insight Into ASX 200 And Futures

S&P/ASX 200 Futures Index (AUS200) dropped significantly along with the other substantial global market indices on 6 May 2019. The index tracks the movement of ASX200 shares prices.

The ASX200 plunged amid trade talks tensions which emerged overnight over the tweet from the United States president Donald Trump regarding raising tariffs on imported Chinese goods worth $200 billion from 10% to 25%.

The prices of ASX futures tumbled as the constituent shares of the index responded to the fear of global economic slowdown. The concerns of a potential downturn were raised in the market after the United States president Donald Trump said that he would increase the tariff on Chinese goods substantially.

The tweet from Donald Trump made the dollar prices strong against various currencies such as AUD, CNY, amid high leverage enjoyed by the U.S. Government at the time of trade war.

The drop in domestic currency and fear of a potential slowdown in the global economic conditions led the Australian top 200 shares to nose-dive today.

As per the data from the ASX, out of 200 shares in the index, 162 shares traded on a negative note during the day’s session, while only 26 shares traded on a positive note and 12 remained flat.

The top loser in the index was Cimic Group Limited (ASX: CIM), a service provider in Australia, which dropped significantly after starting the day’s session at A$48.78. The stock ended the day’s session at A$46.50, down by 7.07% as compared to its previous close.

The 7% fall range was the highest on ASX 200, and a percentage gain of 2.83% remained the highest. The gain of 2.83% on the falling scenario was scored by Domain Holdings Australia Limited (ASX: DHG).

However, the Gold miners such as Regis Resources, Pilbara Minerals, St Barbara, remained in positive territory over the surge in gold prices amid Trump’s roar on the tariff.

ASX200:

The ASX200 is an index which is majorly composed of the Financial sector and Material sector, the former holds approx. 30.1% weight and the latter carries around 17.7% weight in the index. The rest of the space is occupied by other sectors such as Health Care, Industrial, Consumer Discretionary, Real Estate, Energy, Consumer Staples, Information Technology, Telecommunication Services and Utilities.

The tick size of the index is $25, so the 1-point movement in the market price of ASX200 accounts for A$25. The current market cap of the index is approx. A$1,824.85 billion, and the index is rebalanced quarterly for the inclusion of new shares or deletion of old shares. The shares which meets the eligibility criteria gets added to the index, and the shares which no more meets the eligibility gets removed from the index. As per the Australian Stock Exchange, the next rebalancing date of the index is 21st June 2019.

The intention of creating the index was to provide the investors and traders with an opportunity to take exposure to top 200 shares on the Australian Stock Exchange, without buying individual shares of each of the company included in the index.

ASX Futures (AUS200):

The ASX futures track the ASX200 companies and provide 24 hours trading and investing opportunities to investors and traders.

Wall Street is to be watched for any drop as indicated by futures and how the scenario will impact ASX 200 Stocks. (Wall Street futures point to 2 per cent drop tonight)


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