The winners and losers
The banks did most of the leg work yesterday, with some notable contributions from some of the relatively smaller market-cap stocks. The banks were led by a solid rebound in the CBA share price, which rallied 2.90% to push above the $70.00 handle following several weeks of hard selling. Tech stocks were the next best performing sector yesterday, climbing 1.45% itself, thanks to the ASX’s biggest gainer for the session, WiseTech Global, which closed 5.65% higher for the day. The major loser out of yesterday, in what amounted to the only real black mark on the session, was Telstra, which was dumped 4.81% after the company announced a major restructure of the business, along with a downgrade to profit expectations. In the day ahead, look for more action in financials, along with signs that the momentum that has carried index higher this week is beginning to wane.
The little Aussie battler
One area of the Australian market that has been punished this week, amidst escalating trade-war tensions, is the AUD, which fell on Tuesday to a 12-month low against its US counterpart. After several weeks of range trading and even a respectable recovery, the spike in risk aversion on Tuesday sent the local unit plunging, to break through support at 0.7410 to settle just above June 2017’s low of 0.7372. The spill seems to have been cleaned-up for now, as trade returns to a close level of normalcy. However, given the RBA’s clear position of keeping interest rates low (so not to place further stress on household balance sheets), combined with the US Fed’s growing hawkishness regarding rate hikes, further falls from the AUD/USD should be expected.