The buzz around ASX being on a sell off trend!

Leave a comment
Australian Economy, Macro Economics

It seems that the Wall Street’s lead of closing lower at the behest of the threats from Washington to curb Chinese investment in the US, was followed by the Australian equities as well, as seen on June 26, 2018. However, the S&P/ASX 200 moved from a big opening loss to close 0.2 percent lower or 12.8 points at 6197.6 points, and avoided the bigger loss made on Wall street as at June 25, 2018. The US also saw a decline in the Dow Jones Industrial Average by 1.3 percent to 24,252 points and the S&P 500 to 2,717 points down by 1.4 per cent. The Nasdaq tech-heavy index fell to 2.1 per cent to 7,532 points, as at June 25, 2018. However, as at June 26, 2018, the share markets were seen to have stabilized a bit with US share indices recovering (DJIA up 0.1% and S&P up 0.2%) with rebound in tech shares and rise in energy plays. On the other hand, FAANG stocks (Facebook, Apple, Amazon, Netflix and Google) were on a sinusoidal trend and were seen to stabilize on June 26, 2018 after the initial hiccups. The recent downtrend was based on the trade war fears that developed on the additional goods tariffs on Chinese imports beginning July 2018.

The whole saga of events impacted Australian stocks and the tech growth darlings like Altium, WiseTech and Appen, were seen to be falling down on ASX on June 26, 2018 (all around 4% by mid-day trading). In fact, the winds took a reversal as WiseTech, which had fallen about 3% in last five days, recovered by 3.79% a day later. Even Appen was seen to be moving up about 2.4% in initial trading post the sell-off.

Stocks like BHP Billiton and RIO Tinto under the materials and mining sector also slipped on ASX while a recovery was seen on June 27, 2018. However, Commonwealth Bank of Australia (CBA) shares rose against the trend on June 26 as they confirmed split of the wealth manger CFS Group. Australia and New Zealand Banking Group Limited (ANZ) and National Australia Bank Limited (NAB) stocks made modest gains making the banking stocks the market leaders, however, the rise was not seen to be continuing that well on June 27, 2018.

Given this to be the final week of the financial year, many sell-offs are being witnessed amid the threat on curbing of overseas investments in the US. Lately, the housing cycle has hit shares of CSR, the building materials group while banks were tightening their lending criteria in property markets and the foreign investments in housing markets have slowed down.

The Australian share market made modest gains from its lower open on June 26, 2018. Continuing from what was seen in a day’s framework and with some replacements in better performing stocks at the back of rally in oil and iron ore prices, ASX is still expected to trend lower on June 27, 2018 while weakness seems to be pouring in from different sectors though mining sector has been on the rise.

All in all, trade jitters and other domestic level issues that have been hovering around ASX seem to be slightly dodged by the energy sector movements, as at June 27, 2018; however, the stocks still would see some impact from macro standpoint before settling into the new financial year.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Leave a Reply