Pre-Open Data
Key Data for the Week
- Monday – EUR – Consumer Confidence decreased by 0.4 points to -22.2.
- Tuesday – EUR – Consumer Price Index
- Tuesday – US – Consumer Confidence
Australian Market
The Australian sharemarket enjoyed a positive start to the week, as the ASX 200 rose 1.5%. The local index followed a solid lead from the US, in what was the S&P 500’s first weekly gain in seven weeks.
The Information Technology sector was the best performer on the market, up 4.6%, as investors sought opportunities in the heavily weakened sector. Afterpay’s owner, Block, surged 10.9%, while fellow buy-now-pay-later provider, Zip, added 14.0%. Accounting software provider, Xero, lifted 5.2%, while Megaport closed the session 8.6% higher.
Local baby-formula manufacturer, Bubs, soared 40.2% after it was announced the company had received FDA approval to immediately export their products to the US. As a result, The a2 Milk Company also experienced strong gains, as it added 10.4%
The Utilities sector was the only laggard on the market yesterday, as AGL announced the potential demerger of their coal business had fallen through. The company dropped 1.2% after investors were set to vote against the demerger. Among the other Utilities companies, Origin Energy lost 0.3% and APA Group closed the session 0.6% lower.
The Australian futures market points to a 0.16% fall today.
Overseas Markets
European sharemarkets were higher on Monday, as the Travel & Leisure sector led the gains following an increase in domestic and international travel. International Consolidated Airlines was the best performer, up 2.9%, while easyJet and Lufthansa added 0.9% and 1.3% respectively.
Gains were also seen in the Information Technology sector, after it was announced China would ease current COVID restrictions to encourage a return to work and look to increase stimulus measures. As a result, Infineon Technologies and ASML Holdings added 2.0% and 2.7% respectively, while Prosus closed the session 3.2% higher.
A slight increase in the price of iron ore led the Materials sector higher, as the removal of restrictions in China is set to increase the demand for iron ore. London-listed Rio Tinto eked out a less than 0.1% gain, while Glencore added 0.2%. By the close of trade, the STOXX Europe 600 added 0.6% and the German DAX lifted 0.8%, while the UK’s FTSE 100 added 0.2%.
US sharemarkets were closed overnight for Memorial Day.
CNIS Perspective
European Union members continue to derive methods to restrict Russia’s involvement across the continent.
They are currently negotiating their sixth sanctions package, with the key outcome being an oil embargo, which would be the biggest move since cutting off Russia's biggest banks from the SWIFT messaging system, depriving Putin of billions of dollars each day in revenue.
However, with 27 heads of state and vastly different levels of reliance on Russia, it’s a major battle in itself.
Hungary is leading a small group of countries against the proposal that would ban Russian oil imports, where it gets more than 60% of its oil supply and 85% of its natural gas. Hungary believes it can't afford to take such aggressive moves.
While alternative supply can be achieved over time to those countries with a greater disadvantage, coming to an agreement to ensure fair price competition among EU members given the higher prices that would eventuate remains a major sticking point.
While the EU leaders now enter a two-day summit to address the energy sanction, reaching a unanimous agreement looks some way off, at the very least, delaying the implementation of any restrictions.
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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