The Winners and Losers
The success in the ASX200 last week was broad-based, with most sectors clocking gains. A rebound in bank stocks, and therefore the broader financial sector, underpinned the Australian markets advance, paring the considerable losses sustained amid the week prior’s political chaos in Canberra. Utilities stocks were the best performing on an absolute sector-by-sector basis, climbing 2.75 per cent, while consumer staples stocks were held steady by strong activity in Bellamy’s and Blackmores share price.
The only major drag on the market last week was activity in the Telco space, which pulled back as the aura emanating from the announced merger between TPG and Vodafone faded. The share price of TPG was still one of the leaders for the week, rallying another 11.77 per cent; however, it was the diminished knock-on effect to other companies within the sector that weighed on the Telcos, with the share price of the likes of Telstra hitting near-6-month highs, before pulling back towards the $3.00 per share mark.
The ASX200 its strength and resilience last week, shrugging off the week prior’s domestic political uncertainty, to hit levels not witnessed since January 2018. The week’s high of 6373 coincided well with an upward support line previously honoured by the market and comes after bouncing of familiar support at 6240. Following an (on-balance) solid reporting season, the Australian market looks willing to track the strong activity in global equities, particularly out of the US, finding additional support too in the rapidly depreciating AUD. Further falls in the local currency have been behind much of the Australian share markets rally this year, a dynamic that may well continue this week if economic data is lacklustre and interest rates markets keep pricing out rate hikes from the RBA.0.