Why did ASX start the week on a tepid note?

  • February 22, 2021 04:17 PM AEDT
  • Tribhuwan
    Author Tribhuwan
    37 Posts

    Tribhuwan is an Analyst at Kalkine Media Pty Ltd. He writes on financials, consumers products, fast-moving consumer goods, emerging companies, and economic policy. In these areas, he also covers global businesses. He is a graduate in BCom (Hons) from...

Why did ASX start the week on a tepid note?

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  • After falling sharply in the afternoon, the ASX 200 index has recovered towards the close on Monday. 
  • The materials sector remains the only gainer, while minimal losses were seen in financial, consumer staples, real estate, and energy sector indices.
Gold MTF non-AMP

Bond yields are rising across the board as the markets are pricing prospects of strong economic recovery over the near term. Vaccine jabs are also rolling out aggressively across many nations while life is returning to normalcy, albeit with uncertain spikes of infections.

Commodity prices are rising as demand is recovering. Since 2021 is going to be a recovery year, bond yields are likely to remain higher as risks to the global economy are receding. 

Australian 10-year bond yield breached the 1.5% mark today as investors sold the safe-haven assets. ASX 200 index was slightly higher towards the close of the session. The materials sector was the only gainer in the ASX 200 today. 

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Heavy losses were apparent in healthcare, consumer discretionary, information technology, and telecommunication. But some sectors indices saw relatively small losses, including industrials, financials, consumer staples, and A-REIT.

Read more: Five dividend stories that you might have missed this morning

Materials sector stocks on the upside included BHP Ltd, Rio Tinto, Fortescue Metals, BlueScope Steel, Mineral Resources, New Hope Corporation, Evolution Mining, OZ Minerals. Insurance stocks QBE Insurance and nib Holdings were also higher. 

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The best-performing stocks in the ASX 200 were Costa Group, Webjet Ltd, Corporate Travel, Sandfire Resources, and Flight Centre Travel. Most losses were seen in ARB Corp, Appen Ltd, Ansell Ltd, Platinum Asset Management, and Fisher & Paykel Healthcare. 

Many ASX companies have disclosed results and earnings today. Dividend payments are recovering as companies continue to please shareholders with dividends. Most of the firms are surprising on the upside in terms of dividend; a dividend slump in the wake of a cash-crunched pandemic appears to be fading away. 

Read more: Why are ASX shares slightly higher at noon?



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