Pre-Open Data
Key Data for the Week
Key economic data released this week:
- Monday – EUR – Industrial Production declined 1.6% in December, weaker than consensus expectations.
- Monday – UK – Rightmove House Price Index – House prices lifted 0.5% in February and have increased 3.0% year on year.
- Tuesday – AUS – RBA Meeting Minutes
- Tuesday – EUR – Gross Domestic Product
Australian Market
The Australian sharemarket lifted 0.9% on Monday. Gains were broad based, with only the Utilities and REITs sectors in the red, while the Telecommunications and Materials sectors were the strongest performers.
Travel stocks were mixed yesterday, following the suspension of the Trans-Tasman travel bubble for three days due to new locally acquired cases in Auckland. Sydney Airport added 0.2% and Qantas gained 0.7%, while FlightCentre and Webjet lost 0.6% and 0.2% respectively.
The Information Technology sector rose 1.0%, lifted by gains among buy-now-pay-later companies. Zip Co added 16.9% and Sezzle rose 7.3%, while Afterpay gained 1.6%. Artificial intelligence company Appen lifted 2.4%, while accounting software platform Xero added 0.4%.
The Materials sector closed 1.6%, as the mining heavyweights closed higher. Fortescue Metals climbed 2.5%, while BHP and Rio Tinto rose 2.3% and 1.8% respectively. Goldminers were mixed on Monday; Newcrest Mining added 0.4%, while Northern Star and Evolution Mining slipped 1.5% and 0.2% respectively.
The Australian futures market points to a 0.32% rise today, driven by stronger overseas markets.
Overseas Markets
European sharemarkets advanced on Monday, as the broad based STOXX Europe 600 gained 1.3%, to reach its highest level since late February 2020. French media group Vivendi rallied 19.6% after the company announced it intends to distribute 60% of Universal Music’s capital to investors. Renewable energy stocks extended gains; Vestas Wind Systems lifted 1.5% and Siemens Gamesa Renewable Energy added 0.7%. The Financials sector also enjoyed gains overnight; HSBC and Deutsche Bank both closed up 2.2%, while Lloyds Bank and Barclays climbed 5.4% and 5.5% respectively.
By the close of trade, the German DAX rose 0.4%, while the UK FTSE 100 climbed 2.5% after the UK announced 15 million COVID-19 vaccinations have been administered.
US sharemarkets were closed overnight for a public holiday.
CNIS Perspective
Lunar New Year and Golden Week are two of the largest holiday/seasonal events to impact the Chinese stock market, and this year we see them occur in a unique and ongoing COVID-19 environment.
To date in February, trading volumes are 20% below their peak levels in January, which is consistent with previous years, where holiday induced lower volumes have seen the market slump and often given rise to the saying ‘Chinese New Year Dump’.
However, that’s not the case this year - the Hang Seng closed at a record high on February 11!
The most obvious reason for the market strength is the global market momentum being driven by Western stimulus and a strong Chinese economy, as well as Western participation in Chinese IPOs, e.g. Kuaishou Technology listed at HK$115 and closed as of 11 February at HK$398, a gain of 346%.
Hong Kong is now seen as a more global exchange, which looks like it is challenging traditional market movements around one of its biggest events of the year.
Time will tell what impact the Lunar New Year will have on markets moving forward, but things do seem a little different this time.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
Disclaimer
The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.
Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814.
