ASX ends Friday session in red but sets gains for the week

  • January 22, 2021 04:58 PM AEDT
  • Kunal Sawhney
    CEO Kunal Sawhney
    2781 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

ASX ends Friday session in red but sets gains for the week

Summary

  • ASX shares end lower on Friday as financials and miners led the losses in the ASX 200 pack. Mining trio BHP, Rio Tinto and Fortescue Metals closed in the red. Big four bank also joined miners in the red territory. 
  • BNPL highflyers, including Afterpay and Zip Co, also slipped on Friday as investor took money off the table. 
Gold MTF non-AMP

On Friday, Aussie markets were lower, but they closed the week on the green side. For December, preliminary retail sales data showed retail trade fell 4.2% over November, but retail sales were up 9.4% over the year. 

Source © Kalkine Group 2021

After a strong pick up in November 2020, the consumer spending fell as large falls were recorded in household goods retailing. Similarly, consumer spending fell in apparel retailing, personal accessories, departmental stores. 

Investors pulled some money out of markets as ASX capped off a winning week but a red Friday. Selling pressure was evident in high flying technology shares. Energy, materials, information technology, financials, industrials, utilities were lower in the ASX 200 pack. 

Afterpay (ASX:APT) and Zip Co (ASX:Z1P) rose in the morning session but fell by the noon. Rare earth miner Lynas (ASX:LYC) was the top gainer in the ASX 200 index after the company reported to invest in Texas and penned an agreement with the US Department of Defence. 

In the US, Joe Biden commenced his Presidential term. Over the next few months, the new US President would push his agenda for record spending to overcome the economic destruction. 

Source © Kalkine Group 2021

Markets are also going into earnings season. In the last reporting season, companies had avoided full-year estimates given the uncertainty with the pandemic. But corporates are providing teasers to exchanges increasingly as reporting is nearing. 

As a result, share prices that missed to price an earnings recovery are recovering to higher levels as companies continue to guide for February reporting season. 

Prime Minister Scott Morrison has today cleared that employees won’t be forced to take vaccines, but households and workforce are ‘strongly encouraged’. Australia is producing AstraZeneca vaccines domestically, which will ensure that vaccines are available to Australians. 

Airlines asked the Federal Government to extend JobKeeper payment to the industry. The aviation sector is witnessing crunch not only in Australian but internationally as well. The base case estimate is that international traffic will likely recover in a year. 

Market news 

On Friday, financials and miners – the two largest industries in Australian, led the losses. Big four bank pack was down. Large Australian miners, including BHP Group (ASX:BHP), Fortescue Metals (ASX:FMG), Rio Tinto (ASX:RIO), were also lower. 

FMG shares were down even though the company provided estimates for the upcoming reporting season. Cryptocurrencies have lost large gains touched. Bitcoin has come down to nearly USD 29k from peaks around USD 38k. 

Source © Kalkine Group 2021

Perpetual Limited (ASX:PPT) was also lower after the company reported net outflows in the December quarter. Washington H Soul (ASX:SOL), Unibail-Rodamco-Westfield (ASX:URW), Afterpay, Magellan Financial (ASX:MFG) led the falls in the ASX 200 index. 

 

 


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