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Highlights
- ASX 200 closed the week 0.8% higher, propelled by IT and telecom stocks.
- Weakness in global commodity market sentiment continued to weigh down on Australian material and energy sector.
- Concerns about US Fed’s rate hikes to tame inflation and a global recession continues to worry investors.
ASX 200 index ended its two-week losing trail to close 0.8% higher today. Lithium shares bounced back from yesterday’s lows. Interest rate-sensitive technology stocks also moved higher, taking cues from US markets. Energy sector remained the biggest loser, as oil prices slipped on recessionary concerns. In last five trade sessions, the ASX 200 index has gained 1.49% though still down 13.07% on a YTD basis.
How were sectors and indices placed?
Energy and material sectors were the only ones that closed red while nine other sectors edged higher alongside the ASX 200 Index. Information technology and telecommunication service stocks led gains, moving up 6% and 2.66%.
Volatility indicator- A-VIX moved further 4.47% below from yesterday. Meanwhile the All-Ordinaries index added another 1.06%. The Large cap stocks represented by ASX 50 index (XFL) closed 0.40% higher, while Midcap index (XMD) gained 1.81%. The ASX Small Ordinaries index (XSO) reversed yesterday’s losses and closed 3.196% higher.
Top winners and laggards
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While A-REIT sector was gaining, Unibail-Rodamco (ASX:URW) shares registered losses throughout the day. Other top losers belonged to the energy and materials sector moving along the sectoral trend. Top gainer of the day was healthcare stock Life360 (ASX:360), followed by fintech player ZIP Co. (ASX:Z1P) from the information technology sector.
Newsmakers of the day
- Crown Resorts (ASX:CWN) grabbed headlines as US private equity giant Blackstone completed its buyout. Blackstone has reportedly pledged to rebuild Crown Resorts and its image.
- The Star Entertainment Group (ASX:SGR) was also in news as the NSW government advised its proposal to increase the number of gaming machines at The Star Sydney as inappropriate. Reportedly, it was done considering significant changes happening in the casino sector, proposed changes to NSW Casino Control Act 1992, establishment of a new regulator and other reforms to regulatory controls.
- Meanwhile, investment manager Magellan (ASX:MFG) completed sale of its 11.6% stake in Mexican-style, fast-food chain Guzman y Gomez. The stake sale happened for AU$140 million.
- Regional Express Holdings (ASX:REX) signed a 10-year agreement with Fight Centre (ASX:FLT) making it ‘partner of choice’ for the travel agency. The airline signed partnership agreements with FLT peers Helloworld, Webjet, Corporate Travel Management to compete in the aviation sector.
- Earlier in the morning, Vulcan Energy (ASX:VUL) shares grabbed investor attention. VUL share price soared post the lithium miner’s announcement of European auto giant Stellantis becoming Vulcan’s second-largest shareholder. An 8% stake in Vulcan was taken over by Stellantis for AU$76 million.
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On global front
Technology sector stocks seemed to be attracting investors globally. While investors were evaluating inflation and rate hikes, geo-political and supply chain pressures remain a cause of concern.
In the US, Wall Street closed higher yesterday. However, US data and Federal Reserve commentary added to recessionary concerns. Jobless claims in US were close to a five-week high, while manufacturing and services were down. Fed Chair Powell, in his second day of testimony to lawmakers, reaffirmed his commitment to cutting down inflation as ‘unconditional’.
In Asia, stocks were headed higher. Japan’s Nikkei gained alongside neighbour South Korea’s KOSPI. Hong Kong’s Hang Seng also climbed up and China’s Shanghai Composite and Shenzhen Component were also higher.
On commodities front
- Copper, also considered an indicator of economic output due to its various industrial applications, slid down to its reportedly sharpest weekly fall since the market meltdown due to Covid-19.
- Oil slipped on fears of slower demand from a probable US economic growth slowdown and supply concerns.
- Gold prices went down further from yesterday’s lows on Friday morning in Asia amid worries of big interest rate hikes in the US weighing bullion demand.
- Other precious metals, platinum and palladium gained while silver also continued its trail downhill following the yellow metal.
