ASX 200 update: Market inches higher again, with CBA, NAB and Westpac leading gains

Easing international trade tensions may influence the Australian share market this week, but local factors are likely to be top-of-mind for economists.

Official monthly data on Australian employment will be released on Thursday. These figures will be scrutinised closely as an important measure of the wider economy and growth.

Earlier this month, Reserve Bank of Australia (RBA) Governor Dr Philip Lowe said the Board would “continue to monitor developments, including in the labour market, and ease monetary policy further if needed”, indicating that increases in the jobless rate could potentially contribute to further cuts to the official cash rate.

Another economic indicator is house prices, and more data is due out tomorrow on that front.

Last week, big four bank Westpac became the latest lender to cut rates on some of its home loans, with Canstar’s home loan database showing that there have been over 1,600 variable and fixed rate cuts so far in 2019.

Minutes from the RBA’s September board meeting will also be released on Tuesday, and may offer some insight as to whether another cash rate cut this year could be likely.

Australia calls for a ceasefire in trade war

This week Australia joined with near-neighbour Indonesia and fellow G20 nations Canada and Singapore to call for a ceasefire in the US and China trade war, saying it was risking international trade.

“At this moment, rising trade tensions are a serious concern,” representatives of the four nations said in a joint statement.

“While we acknowledge that there are legitimate issues that must be addressed, the risks of collateral damage are growing.”

The NAB trading conditions index (a monthly NAB survey) revealed both business confidence and conditions had declined in the month of August, with both at +1 index points – well below long-run averages. Trading and and profitability were noted as the components driving this decline.

Official statistics from the Australian Bureau of Statistics (ABS) showed an increase in new lending to households in the biggest jump in almost five years, although the ABS noted the numbers were still down from their 2017 peaks. The number of tourists visiting Australia also increased 3.3% in over the last year.

The European Central Bank goes further below zero

The European Union’s central bank has further cut its benchmark deposit rate to -0.5% and announced an ambitious quantitative easing package designed to help revitalise a sluggish Eurozone economy. The ECB cut the deposit rate another 10 basis points and will buy €20 billion in bonds every month, indefinitely, from November.

US President Donald Trump, meanwhile, renewed his Tweet pressure on the US Federal Reserve to force interest rate cuts, complaining his nation’s Board is delaying.

But President Trump was more conciliatory regarding China. After the Asian superpower determined it would exempt 16 US products from additional tariffs, Mr Trump tweeted he would delay additional tax burdens on US$250 billion worth of Chinese imports by two weeks, from 1 October to 15 October.

In other US news, the new iPhone series launched at a lower price point than previous releases, and with more media-subscription service options. After the launch, enthusiastic investors pushed the market capitalisation of Apple to more than US$1 trillion.

ASX up for the fourth week in a row

Back home, it was another positive week for the ASX 200, which rose 0.33% to end the week at 6,669 points.

Top stocks last week:

ASX 200 – Top 5 Share Price Gains (06/09/2019 to 13/09/2019)
Rank Company Closing Share Price % Change
1 Sigma Health Ltd $0.67 12.7%
2 Alumina Ltd $2.44 9.9%
3 TPG Telecom Ltd $7.06 9.9%
4 Adelaide Brighton Ltd $3.23 9.7%
5 Fletcher Building Ltd $4.80 9.0%
Prepared by Canstar. Prices taken as of week to week close.

 

ASX 200 – Top 5 Market Capitalisation Gains (06/09/2019 to 13/09/2019)
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 Commonwealth Bank $4,124,658,051 $81.87 2.9%
2 National Aust. Bank $3,964,143,228 $29.13 5.0%
3 Westpac Banking Corp $3,437,579,841 $29.62 3.4%
4 BHP Group Ltd $2,179,930,032 $37.05 2.0%
5 Fortescue Metals Group $2,016,722,022 $9.07 7.8%
Prepared by Canstar. Prices taken as of week to week close.

Three of the big four banks led growth in the ASX this week, with the Commonwealth Bank, National Australia Bank and Westpac Banking Group increasing their market capitalisation.

It comes amid an ongoing search by many investors for ‘yield stocks’ – meaning those that offer regular dividends – and green shoots in the housing market. Westpac’s share price hit its highest level in over a year last week, climbing to almost $30.

Community pharmacy and hospital operator Sigma Health’s stock price increased 12.7%, a week after releasing its first profit results following a restructure.

TPG Telecom Ltd also notched up almost double-digit share price growth last week. Its chief executive officer and founder David Teoh gave evidence in the Federal Court action between the telco and the Australian Competition and Consumer Commission. The ACCC, Australia’s competition watchdog, had blocked a merger between TPG and Vodafone Hutchinson.

Biggest losses last week:

ASX 200 – Top 5 Share Price Losses (06/09/2019 to 13/09/2019)
Rank Company Closing Share Price % Change
1 Appen Ltd $21.78 -16.6%
2 Pro Medicus Ltd $27.91 -16.4%
3 Bravura Solution Ltd $4.20 -13.4%
4 Idp Education Ltd $14.79 -13.0%
5 Clinuvel Pharmaceuticals Ltd $23.76 -12.3%
Prepared by Canstar. Prices taken as of week to week close.

 

ASX 200 – Top 5 Market Capitalisation Losses (06/09/2019 to 13/09/2019)
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 CSL Ltd -$5,470,804,060 $229.92 -5.0%
2 Newcrest Mining -$2,578,234,937 $33.43 -9.1%
3 Woolworths Group Ltd -$2,202,707,617 $36.31 -4.6%
4 ASX Ltd -$1,122,851,940 $79.92 -6.8%
5 Wisetech Global Ltd -$1,091,363,756 $34.66 -9.0%
Prepared by Canstar. Prices taken as of week to week close.

Dataset and analytics company Appen Ltd lost 16.6% of its market value, amid a decline in tech stocks, which dropped 5.39% overall.

And global pharmaceutical company CSL shed more than $5.4 billion in market value, despite trading at 33% higher than 12 months ago.

Woolworths Group also lost ground as its release of a new promotion for shoppers appeared to receive a lukewarm reaction from investors.

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About Rosanne Barrett: 

 Photograph of Rosanne BarrettRosanne Barrett writes stories that inform, entertain and inspire. She has had more than 15 years’ experience in daily news media across Australia and Hong Kong, including eight years as a staff reporter at The Australian. Ms Barrett produces journalism, content and copywriting across a range of industries.

Cover image source: Pavel Ignatov (Shutterstock)

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