Australian markets have not reached closer to levels seen before the March pullback, but there has been a decent recovery over the recent months. More than 40% of the index weight in S&P/ASX 200 Index includes financials, consumer discretionary, energy and real estate – sectors that are perhaps hardest hit by the COVID-19 crisis.
Incoming economic data will continue to reflect pain for some time, as lockdowns were at the peak in April. But the Australian economy has been reopening, and leading indicators are suggesting a revival in economic activities.
As per the latest Commonwealth Bank Flash Composite PMI® for June, Australian private sector depicted revival in output, as businesses continue to embrace lesser restrictions amid the COVID-19 situation. Businesses continued to reduce employment due to unused capacity, but new orders stabilised.
Composite PMI came at 52.6 in June after clocking 28.1 in the previous month, indicating an expansion from contraction. Some firms that were closed earlier restarted their operations in June. Services sector posted the first rise in activity in five months, while the manufacturing sector was falling but at a slower pace.
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