Markets opened in positive territory this morning, reversing the declines of last week after positive international news.
Into this more upbeat market – for those not distracted by the Melbourne Cup – the Reserve Bank of Australia (RBA) will meet tomorrow for its monthly meeting on monetary policy.
While most economists surveyed do not expect another interest rate cut, there have been reports the Australian Government has been presented with a Treasury analysis indicating the RBA may consider unconventional monetary policy as a form of stimulus down the track.
The RBA will offer some clues on its next steps with its monthly statement on monetary policy later in the week. This is also expected to impact consumer sentiment and the sharemarket.
ASX falls on bank jitters
Last week the ASX 200 reversed its four-week gains to end at 6,669 points. After eight consecutive days of climbing, from Wednesday the market fell daily to end lower for the week.
| S&P and All Ords Movements (25/10/2019 to 01/11/2019) | ||
| Closing Points | % Change | |
| S&P/ASX 200 (XJO) | 6,669 | -1.04% |
| All Ordinaries (XAO) | 6,779 | -0.90% |
| Prepared by Canstar. Points taken as of Monday open to Friday close. | ||
Amid the release of quarterly results and the ongoing disclosures in a series of annual general meetings, the market decreased in value by 1.04%.
Financial stocks pulled down the market – falling 3.1% overall as a sector. The big four banks contributed – they all fell last week amid announcements flagging caution for the financial year ahead. ANZ (ANZ) suffered the biggest drop of 6.6%, followed by Westpac (WBC) falling by 4%, Commonwealth Bank (CBA) losing 3% and National Australia Bank (NAB), whose share price fell by 2.6%.
ANZ (ANZ) revealed flat cash profits and Macquarie Group (MCG) also lost ground after it forecast a lower profit result for the year ahead.
Consumer stocks fall: Qantas, Coles and Woolworths also slide
The consumer discretionary sector ended the week 1.78% lower.
On Friday, Qantas’s (QAN) share price was down after it revealed three of its Boeing 737s had hairline cracks.
| Sector Movements (25/10/2019 to 01/11/2019) | ||
| Closing Points | % Change | |
| Consumer Discretionary (XDJ) | 2,673 | -1.78% |
| Consumer Staples (XSJ) | 12,326 | -0.90% |
| Energy (XEJ) | 10,962 | -0.39% |
| Financials (XFJ) | 6,245 | -3.10% |
| Health Care (XHJ) | 38,763 | 0.95% |
| Industrials (XNJ) | 6,996 | 0.75% |
| Information Technology (XIJ) | 1,324 | -0.06% |
| Materials (XMJ) | 13,047 | 0.13% |
| Telecommunication Service (XTJ) | 1,252 | -0.80% |
| Utilities (XUJ) | 8,222 | 2.05% |
| Prepared by Canstar. Points taken as of Monday open to Friday close. | ||
The consumer staples sector was down 0.9%, amid news Woolworths (WOW) had underpaid thousands of its salaried workers to the value of $300 million over several years.
Wooloworths announced the family-focused Ooshies and Discovery Garden campaigns had helped it increase comparable-store food sales by 6.6% when releasing its first quarter sales results.
Over at Coles (COL), which announced its first quarter sales results the re-run Little Shop promotion did not boost returns significantly (comparable sales were up 0.1% over the quarter).
The utilities sector led the gains, up 2.05%.
Costa and Bega Cheese down
Australia’s biggest avocado and berry producer, Costa Group (CGC), emerged from a trading halt this week to reveal it was downgrading its forecasts again due to drought, and request a round of equity. The market did not like the news and share price fell 22%.
Bega Cheese (BGA) also reported a decline in its forecasts, sparking a 17.5% share price drop overall for the week.
Online lottery company Jumbo Interactive (JIN) and medical supply company Pro Medicus (PME) also fell despite not releasing any news. Commentators suggested that Jumbo shares fell due to investors selling their shares to make a profit after a strong FY2019 performance; and that Pro Medicus was suffering for the news that a rival firm had won a major medical imaging contract in Western Australia.
Western Areas Ltd (WSA) announced testing had confirmed new nickel-copper deposits at itsMount Alexander mine but the market was not impressed, sending the price down 7.4%.
| ASX 200 – Top 5 Share Price Losses (25/10/2019 to 01/11/2019) | |||
| Rank | Company | Closing Share Price | % Change |
| 1 | Costa Group Holdings (CGC) | $2.70 | -22.0% |
| 2 | Jumbo Interactive (JIN) | $20.44 | -21.2% |
| 3 | Bega Cheese Ltd (BGA) | $3.63 | -17.5% |
| 4 | Pro Medicus Ltd (PME) | $24.64 | -9.9% |
| 5 | Western Areas Ltd (WSA) | $3.14 | -7.4% |
| Prepared by Canstar. Prices taken as of week to week close. | |||
| ASX 200 – Top 5 Market Capitalisation Losses (25/10/2019 to 01/11/2019) | ||||
| Rank | Company | $ Change in Market Cap | Closing Share Price | % Change in Share Price |
| 1 | ANZ Banking Group Ltd (ANZ) | -$5,215,636,259 | $26.19 | -6.6% |
| 2 | Commonwealth Bank (CBA) | -$4,354,789,187 | $78.24 | -3.0% |
| 3 | Westpac Banking Corp (WBC) | -$4,083,216,665 | $27.88 | -4.0% |
| 4 | National Aust. Bank (NAB) | -$2,219,924,351 | $28.41 | -2.6% |
| 5 | Wesfarmers Ltd (WES) | -$1,235,885,864 | $39.96 | -2.7% |
| Prepared by Canstar. Prices taken as of week to week close. | ||||
Lithium miners, fintech up
Lithium miners Pilbara Minerals Ltd (PLS), Galaxy Resources (GXY) and Orocobre Ltd (ORE) all made double-digit gains last week – despite a difficult trading year – with lower supply available internationally.
Gold and copper miner Silver Lake Resources (SLR) gained 15%. It released a strong production update to the market. After the market closed on Friday, it announced it had increased its off-market takeover bid for base metal miner Egan Street Resources (EGA).
Financial technology company Iress Ltd (IRE) also rose by 11.6%, following an announcement it had gained the contract of the Victorian-based Emergency Services and State Super fund, which has $31 billion under management.
| ASX 200 – Top 5 Share Price Gains (25/10/2019 to 01/11/2019) | |||
| Rank | Company | Closing Share Price | % Change |
| 1 | Pilbara Min Ltd (PLS) | $0.35 | 23.2% |
| 2 | Galaxy Resources (GXY) | $0.98 | 16.8% |
| 3 | Silver Lake Resource (SLR) | $1.19 | 15.0% |
| 4 | Orocobre Ltd (ORE) | $2.64 | 14.3% |
| 5 | Iress Ltd (IRE) | $12.81 | 11.6% |
| Prepared by Canstar. Prices taken as of week to week close. | |||
Blood products company CSL (CSL) shares continue to rise, up 30% in the last six months, due to a shortage of immunoglobulin, according to commentators.
Fortescue Metals Group (FMG) is continuing its solid run, up 140% in a year, according to The Motley Fool, due to a rise in the price of iron ore.
| ASX 200 – Top 5 Market Capitalisation Gains (25/10/2019 to 01/11/2019) | ||||
| Rank | Company | $ Change in Market Cap | Closing Share Price | % Change in Share Price |
| 1 | Transurban Group (TCL) | $1,147,890,254 | $15.13 | 2.9% |
| 2 | CSL Ltd (CSL) | $855,658,239 | $258.65 | 0.7% |
| 3 | Fortescue Metals Group (FMG) | $554,213,685 | $9.00 | 2.0% |
| 4 | Lendlease Group (LLC) | $491,095,961 | $18.95 | 4.8% |
| 5 | Xero Ltd (XRO) | $411,400,354 | $69.91 | 4.3% |
| Prepared by Canstar. Prices taken as of week to week close. | ||||
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