Pre-Open Data
Key Data for the Week
- Monday – EUR – Gross Domestic Product
- Monday – AUS – MI Inflation
- Tuesday – AUS – RBA Cash Rate Decision
- Tuesday – AUS – Retail Sales
- Tuesday – US – Markit Manufacturing PMI
- Wednesday – EUR – Consumer Price Index
- Thursday – AUS – Trade Balance
- Thursday – UK – BoE Bank Rate Decision
- Thursday – EUR – Retail Sales
- Friday – AUS – RBA Statement on Monetary Policy
- Friday – US – Unemployment rate
Australian Market
The Australian sharemarket snapped a four-day losing streak on Friday, closing up 2.2%. Despite recent market volatility, all sectors finished the session higher, with Consumer Discretionary and Consumer Staples the top outperformers, both up 3.3%. Over the week, the local ASX 200 gave up 2.6%, its third consecutive week in the red.
Gains among all the major banks lifted the Financials sector on Friday, which closed up 2.1%. Westpac was the strongest performer, up 2.3%, followed by Commonwealth Bank, which rose 2.0%, while ANZ and NAB both added 1.5%. Fund managers also enjoyed gains; Australian Ethical Investment rose 2.2%, while Challenger and Magellan Financial Group lifted 1.8% and 0.8% respectively.
The Materials sector rose 1.5%. Mining heavyweights were mixed; Rio Tinto jumped 4.1% and BHP added 2.7%, while Fortescue Metals slipped 0.2%. However, gold miners were weaker; Ramelius Resources lost 8.0% and Newcrest Mining fell 6.4%, while Northern Star Resources gave up 1.3%.
The Australian futures market points to a 0.23% fall today.
Overseas Markets
European sharemarkets eased on Friday, as investors anticipate interest rate hikes and political tensions grow between the Ukraine and Russia. Technology and automaker stocks were the worst performers; Porsche fell 1.8% and BMW slipped 1.7%, while Volkswagen Group lost 1.4%. Banking stocks also weakened; Barclays closed down 3.3%, while Lloyds Bank and HSBC eased 2.0% and 1.9% respectively. By the close of trade, the STOXX Europe 600 posted a 1.0% fall, while the UK FTSE 100 lost 1.2% and the German DAX declined 1.3%.
US sharemarkets advanced on Friday. The Information Technology sector was the strongest performer; Apple climbed 7.0% after the company announced record sales during the holiday quarter which surpassed estimates, while Fortinet and NVIDIA rose 4.6% and 4.1% respectively. Financial services stocks also posted gains; Visa jumped 10.6% after the company reported strong earnings, while MasterCard lifted 9.1% and PayPal gained 3.4%.
Renewable energy stocks also rose; electric vehicle charging station operator ChargePoint climbed 10.5%, while Enphase Energy added 3.2%. Health Care stocks lifted; Danaher Corporation added 4.1% and Bristol-Myers Squibb gained 1.6%, while UnitedHealth Group and Johnson & Johnson closed up 1.0% and 0.7% respectively. By the close of trade, the NASDAQ rose 3.1% and the S&P 500 added 2.4%, while the Dow Jones closed up 1.7%. Over the week, the NASDAQ was flat, while the S&P 500 and NASDAQ lifted 0.8% and 1.3% respectively.
CNIS Perspective
The big Australian is coming home. BHP, the world’s largest mining group with a value of $232 billion, will once again be unified on the Sydney exchange as of today. The 42% portion of the company listed on the London Stock Exchange will leave Britain’s benchmark stock index the FTSE 100, where it was the third largest firm behind AstraZeneca and Royal Dutch Shell. The split hemisphere corporate structure was created in 2001 following the merger of BHP and South African mining firm Billiton.
The elaborate corporate structure made mergers and acquisitions complicated. This was once deemed worthwhile as it allowed the company to tap into London’s stock market for funding. BHP’s shareholders have decided it no longer is. This more nimble, simpler structure will assist in its initiatives to execute its petroleum separation and CEO Mike Henry’s plans to grow BHP’s “Future Facing Commodities” such as battery metals.
This huge rebalance created astonishing trading volume on Friday that will leave the stock the largest index weight within the S&P/ASX 200, jumping to 11.7% from 7.2%. The miner will surpass the Commonwealth Bank of Australia as Australia’s largest company.
Should you wish to discuss this or any other investment related matter, please contact your Wealth Management Team on (02) 4928 8500.
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