While it was difficult to point the finger at exactly what caused the rebound, Canstar’s Josh Callaghan weighs in on the major wins, losses and events that moved the markets last month.
Watch the market wrap-up here, or read the transcript below.
January 2019 Market Wrap-up
The markets have once again delivered us a roller coaster ride in January, with losses from the Christmas crash totally recovered in the month. We saw a steady march upward through the month, with the ASX 200 starting at around 5600 points and closing up over 4% to finish the month at 5864.
This month, it’s actually quite difficult to point the finger at exactly what caused the rebound. Perhaps investors realised that the December correction was overdone and took advantage of the growth opportunities presented by lower prices. The international backdrop certainly had the potential to create chaos on the markets, with the US government in shut-down, a historic Brexit vote and a slow down in growth in the Chinese economy dominating world news throughout the month.
Movements on the local market
Locally, the materials sector which makes up 17% of the index was up 7%. Rio Tinto shares ended up 10.9% and South32 was up 5%.
All 4 major banks traded relatively flat during the month. A small sell-off at the end of the month left them all in the red with the exception of ANZ which closed up 2.3%. Challenger released weaker than expected earnings results. Its share price tumbled 23% in the month. AMP were unable to reverse their ongoing selloff in January, dropping a further 7.8% in January and 56% over the past 12 months.
TPG announced that they would not be building a new 5G network during the month that would be in competition to Telstra’s existing mobile network. Telstra finished up 9.1% for the month. TPG also ended up 8.5% for the month.
CSL’s share price closed the month at around $195, once again threatening to break through the $200 mark, which it first broke through in August last year.
Q4 inflation: what does it mean?
The RBA released their Q4 inflation numbers in January which landed at 1.8% for the year which, while above the market consensus of 1.7%, has softened from the 1.9% from the previous reading and further away from the RBA’s target rate of between 2 and 3%.
All eyes will be on the RBA minutes, released after their meeting on the first Tuesday of February to get any indication of whether a cash rate move down might be on the cards this year.
Cover image source: Katjen (Shutterstock)
About Josh Callaghan
Canstar’s General Manager for Wealth, Josh Callaghan, has accumulated more than 15 years’ experience in banking and finance, with in-depth product knowledge across retail banking, stockbroking, life insurance, health insurance and superannuation. Josh’s experience combined with his passion for new technology and active role in the fintech community has positioned him as a credible thought-leader on the future of finance. Through his work at Canstar, Josh is striving towards a goal of creating a world where building and managing wealth is easy for all consumers.
Follow Josh on Twitter at @CallaghanJosh.