ASX weekly: RBA rate cut lifts CBA, NAB, Westpac & ANZ

The Reserve Bank’s decision to cut the cash rate, which has led many banks to lower home loan interest rates, helped boost the Australian share market last week.

Big 4 banks

The benchmark S&P/ASX 200 closed 0.75% higher at 6,444 points last week, while the broader All Ordinaries index rose 0.53% to 6,525 points.

AMP Capital Chief Economist Shane Oliver said the RBA’s decision to cut the cash rate by 0.25 percentage points to 1.5% on Tuesday last week helped lift banking stocks and give the overall market a “modest boost.”

However, he said cuts to the cash rate would unlikely be enough to stimulate the flagging economy, after official figures showed the country’s economic growth was at its weakest since the Global Financial Crisis and that it was likely to remain soft throughout this year.

“Our forecast remains for another cut in July or August and the cash rate to fall to 0.5% by mid-next year, with an increasing risk that the RBA will have to employ quantitative easing or maybe even ‘helicopter money’ beyond that point,” Dr Oliver said.

ASX 200 Listed Companies – Top 5 Biggest Market Cap Gains and Losses (31/05/2019 to 07/06/2019)
Biggest Gains Biggest Losses
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 Commonwealth Bank (CBA) $2,938,597,582 $80.00 2.1% 1 Rio Tinto (RIO) -$794,402,698 $98.00 -2.1%
2 Westpac (WBC) $1,965,115,484 $27.98 2.1% 2 The a2 Milk Company (A2M) -$756,944,216 $13.64 -7.0%
3 Goodman (GMG) $1,614,354,976 $14.29 6.6% 3 CSL (CSL) -$719,215,564 $203.80 -0.8%
4 ANZ (ANZ) $1,444,919,545 $28.37 1.8% 4 Woodside Petroleum (WPL) -$702,113,662 $34.64 -2.1%
5 National Australia Bank (NAB) $1,419,750,790 $26.90 1.9% 5 Lendlease (LLC) -$699,522,529 $13.03 -8.7%
Prepared by Canstar. Prices taken as of week to week close.

The big four banks led market value rises last week, with the financials among the best performing sectors partly due to the expectation the lower cash rate will help reignite home loan growth.

Market value gains for the major banks ranged from about $1.4 billion for ANZ and NAB to almost $3 billion for Commonwealth Bank.

The mining-related materials sector was under pressure last week amid mixed commodity prices, with oil and gold up and copper and iron ore down, Dr Oliver said.

Mining giant Rio Tinto topped market value losses, with its market capitalisation sliding by almost $800 million.

ASX 200 Listed Companies – Top 5 Biggest Share Price Gains and Losses (31/05/2019 to 07/06/2019)
Biggest Gains Biggest Losses
Rank Company Closing Share Price % Change Rank Company Closing Share Price % Change
1 Eclipx Group (ECX) $1.31 16.4% 1 Syrah Resources (SYR) $1.06 -19.7%
2 Wisetech Global (WTC) $26.92 10.6% 2 Vocus Group (VOC) $3.83 -16.0%
3 Abacus Property Group (ABP) $4.21 9.9% 3 Bravura Solution (BVS) $4.88 -13.9%
4 Goodman Group (GMG) $14.29 6.6% 4 Ausdrill (ASL) $1.33 -9.5%
5 APA Group (APA) $10.80 6.4% 5 Lynas Corporation (LYC) $2.77 -9.5%
Prepared by Canstar. Prices taken as of week to week close.

Fleet management company Eclipx topped share price gains on the ASX 200 index last week, followed by logistics software company WiseTech Global.

Helping boost Eclipx’s shares by more than 16% to $1.31 was a positive broker note from investment bank UBS, which continued to recommend investors buy the company’s shares and it increased the share price outlook.

WiseTech Global’s share price climbed by nearly 11% to $26.92, after the company confirmed that it continued to forecast its full-year revenue to be in the range of $326 million to $339 million, which is up 47% to 53% on the prior year’s result.

Among last week’s top five share price winners were two real estate companies: Abacus Property Group and Goodman Group.

News that Abacus Property has partnered with Charter Hall to buy the remaining stake in office building owner Australian Unity Office Fund that it does not already hold, helped drive its shares up by almost 10% to $4.21.

Shares in commercial and industrial property developer and management group Goodman rose 6.6% to $14.29, despite no obvious news behind the rally.

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