- Australian shares made a strong start to the week’s trading; travel stocks being the market’s best performers.
- There is growing pressure that oil demand is outgrowing supply.
- The NSW government plans to re-open the economy as key vaccination targets are met next month.
- In the crypto space, the average traded volume seems up, suggesting a positive outlook for the week.
“The stock market is designed to transfer money from the active to the patient”, says investing mogul Warren Buffett. On that note, lets look at today’s market performance and associated factors, as another action-packed week starts.
Australian share market update
A boom in local travel and aviation stocks had the local market sit pretty with gains today. A morning announcement from the NSW government took sentiments high as residents were given a roadmap towards potential international travel later this year. This was further catalysed by energy and materials sectors, who led the pack of gains.
The ASX200 closed up Monday, gaining 41.60 points or 0.57 per cent to 7,384.20. Over the last five days, the index has gained 1.88 per cent and is currently 3.26 per cent off of its 52-week high.
7 of 11 sectors were higher along with the ASX 200 Index, barring healthcare, utilities, consumer staples and IT. Energy was the star performer today, gaining 1.89 per cent and 10.17 per cent for the past five days.
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Image description: Bull vs bear- how will the market unfold this week?
Top gainers and losers of the day
The top performer on the ASX pack was global online marketplace Redbubble Limited (ASX:RBL), that soared over 7 per cent. It was followed by two travel companies- Flight Centre Travel Group Limited (ASX:FLT) and Webjet Limited (ASX:WEB), that soared 7 per cent and 5.3 per cent, respectively. The A2 Milk Company Limited (ASX:A2M) also made a place in the gainers list today, rising 5 per cent. Shares of financial services company IOOF Holdings Limited (ASX:IFL) were up by 4.6 per cent.
On the other side, Australian data centre operator NEXTDC Limited’s (ASX:NXT) shares tumbled by 3.7 per cent. Megaport Limited (ASX:MP1) plummeted by 2.4 per cent. Two miners reserved spots in the ASX red zone today- Pilbara Minerals Limited (ASX:PLS) and Chalice Mining Limited (ASX:CHN), falling 2.5 per cent and 2.2 per cent respectively. Fisher & Paykel Healthcare Corporation Limited (ASX:FPH) was down 2 per cent today.
Notable updates from the global economy
China seems to be heading into a power supply shock that could hit Asia’s largest economy hard, as the Evergrande crisis sends shockwaves through its financial system. The clampdown on power consumption is being propelled by rising coal and gas prices, increasing demand for electricity, along with strict targets from Beijing to reduce emissions. Beijing’s unprecedented curbs on the property sector is another indication that China’s economy may shrink this quarter.
There are concerns about worsening fuel shortages. Europe is going through an energy crisis as the nation heads into winter. There is major supply chain disruption. Gas prices have recently surged, and the price of oil has also shot up.
On that note, oil gained at the start of the week’s trading as the crude market is tightening due to the global energy crunch. A rally in natural gas looks set to push demand for oil as users shift fuels.
Back home, the NSW government plans to re-open the economy as key vaccination targets are met next month. The state plans to start re-opening on October 11, when 70 per cent of the population older than 16 will have been vaccinated.
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Besides, economic figures to be released later this week (including figures on building approvals) are likely to spark renewed discussion about the strength of the property market in Australia. The challenges for housing affordability, and potentially for financial stability will be hot topics of discussion as the week progresses.
Asian and global market performance
Asian markets had a good start to the week. Japanese shares rose today, led by cyclical stocks that would benefit from an economic recovery from the COVID-19 lows, as the country plans to lift its emergency measures later this week. The Nikkei share average was up 0.36 per cent. South Korean shares also rose, helped by strong buying from foreign investors for an eighth straight session, although worries over China Evergrande Group's debt crisis kept a lid on gains. The benchmark KOSPI rose 16.49 points.
In Hong Kong, shares of China Evergrande’s electric car unit plunged as much as 26 per cent. The Company may face an uncertain future unless it got a swift injection of cash.
Beyond Asia, Wall Street closed out a choppy week of trading on Friday though the S&P 500 managed its first weekly gain in three weeks, rising 0.1 per cent. The Dow Jones Industrial Average also gained 0.1 per cent. Slightly more stocks in the S&P 500 rose than fell, with communication services companies and banks majorly propelling the increase. Real estate and health care stocks posted huge losses.
Crypto market performance
The weekends were a tad volatile for the cryptocurrency market. Thin volumes over the weekend usually allow a few large orders to influence the market in either direction. As various equity markets open up today, we could witness an increased volatility across the crypto spectrum. The total crypto market capitalisation has gone higher and now stands at USD 1.93 trillion. With the markets moving higher, the average traded volume seems up, suggesting a positive outlook for the week.
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Today, all most all cryptocurrencies traded in the green. The virtual currency Cardano was up 0.72 per cent and has witnessed a gain of more than 3 per cent over the last one week. Following suit, Binance Coin was up 4.02 per cent witnessing a fall of 10.62 per cent over the last one week.
Bitcoin started a recovery wave above the USD 42,800 and USD 43,000 resistance levels. The largest virtual currency traded in the green today and was up 4.72 per cent at USD 44,045.69. The prices of Bitcoin went slightly up after Jack Dorsey’s Twitter has officially enabled third-party bitcoin tipping services for iOS users, giving the option to pay one another across the globe, instantly.
Besides, crypto investors opine that China’s latest blanket ban on virtual currency businesses could be a blessing in disguise for decentralised exchanges (DEX) enabling direct peer-to-peer transactions without an intermediary.