ASX 200 Weekly Wrap: ASX rallies on mining highs

The S&P/ASX 200 Index (ASX: XJO) has made a 4th week of gains to keep the extraordinary new share market bull run alive.

Despite 2 days of red ink on Thursday and Friday offsetting the strong gains we saw earlier in the week, the ASX 200 still managed to power ahead and finish the week with a 1.71% gain.

It was the big miners that underpinned much of the ASX 's positive momentum. Production slowdowns in the iron-heavy Brazilian mining industry prompted an explosion in the iron ore price last week. This pushed the shares of the big ASX iron miners to new highs. Fortescue Metals Group Limited (ASX: FMG) even reached a new all-time high of $14 at market open on Thursday.

Fellow mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) didn't make new highs but still joined the party with 8.37% and 6.99% gains for the week, respectively.

ASX responds to good news

In other news, the ongoing lifting of coronavirus-related restrictions throughout the economy is continuing to flow through to investor sentiment. As were persistent rumors of a potentially successful candidate for a COVID-19 vaccine.

Last week, it was announced the ski season will be going ahead in Victoria. New South Wales is also preparing to allow the reopening of gyms and beauty facilities after pubs were allowed to open their doors again recently. This steady drip-feed of good economic news is also likely playing a part in the wall of confidence ASX investors are building.

All of this 'good news' was enough to offset an eruption of tensions between Australia and China last week. After Australia called for an international inquiry into the origins of the coronavirus, China responded by denouncing Australia's foreign policy and slapping an 80% tariff on Australian exports of barley (although China claims this is 'unrelated'). Barley is not the only valuable commodity Australia sends China's way, and these tensions (combined with some healthy speculation) were behind the more subdued market activity on Thursday and Friday last week.

How did the markets end the week?

As already mentioned, the ASX 200 had a relatively strong week overall. Commencing on Monday at 5,404.8 points, it concluded the week 1.71% higher on Friday at 5,497 points.

Monday and Tuesday were by far the week's strongest trading days, with the ASX 200 chalking up gains of 1% and 1.81% respectively (the latter being the best day for the ASX 200 in May so far). Wednesday also brought a day in the green – albeit one far milder. Then Thursday and Friday saw shares backtrack significantly. Thursday saw the ASX 200 lose 0.4%, whilst Friday saw a heavier loss of 1% overall. It still wasn't enough to nullify the earlier gains of the week or snap the ASX 200's '4 out of 4' streak of weeks in the green.

Meanwhile, the All Ordinaries (ASX: XAO) also had a strong week. It rose 2.1% from 5,492.8 points on Monday to 5,608.8 points on Friday.

Which ASX shares were the biggest winners and losers?

Let's get into the Foolish 'gossip pages' and see which ASX shares were the week's biggest winners and losers. As always, let's start with the losers!

As you can see, Southern Cross Media once again gets the wooden spoon this week. This advertising company has been hit extremely hard during the coronavirus crisis as advertising dollars dry up or head to cheaper alternatives. Closing at just 14 cents per share on Friday, Southern Cross Media shares are now down around 78% since mid-February.

The pain also continues for shipbuilder Austal, which investors apparently still haven't forgiven for being passed over for a major multi-billion-dollar U.S. Navy defense contract. Austal shares still aren't quite at the lows we saw in March, but that 52-week high is slipping further and further away nonetheless.

Unibail-Rodamco-Westfield had another shocker as well and closed on Friday at $3.49 per share. This represents a post-merger all-time low for the European retailing giant.

With the losers out of the way, let's have a look at last week's winners!

Leading the winning pack last week was infrastructure company NRW Holdings, which surged over 30%, despite falling more than 9% before close on Friday. The catalyst for this move was an earnings update, which mightily impressed investors with record revenue numbers. Despite this move, the NRW share price is still down more than 35% from its pre-March highs.

Also joining the party this week was aerial mapping software provider Nearmap, which saw its shares surge last week despite there being no tangible reason for celebration. Nearmap shares have more than doubled since hitting multi-year lows in March, so perhaps more investors are simply trying to jump on the bandwagon with this one.

Lithium miner Lynas was also a beneficiary of investors' affections this week, along with Orocobre and the other ASX lithium stocks. Lithium miners have had a hard couple of years, so investors might be seeing some value in the rock-bottom prices this sector has been throwing up of late.

What is this week looking like for the ASX 200?

With 4 weeks of gains now in the bag for the ASX 200, investors will no doubt be wondering if it's going to be '5 for 5' this week. If all goes well regarding coronavirus and the continuation of restrictions being eased, it might well continue to support bullish sentiment for the share market.

Australia's relationship with China is one area worth watching this week, in my opinion. Putting aside political opinions, the economic impacts of any further retaliatory moves by China on Australian exports shouldn't be underestimated. As such, any developments in this area could have market-moving potential.

Over the past 2 weeks, it has been ASX resource shares that have powered much of the market's gains. The week before last, we had ASX gold miners raising the roof, followed of course by iron miners last week. Thus, the prices of these metals as well as other commodities (oil for instance) also merit a watchful eye.

So before we go, here's how the ASX's movers and shakers, a.k.a. blue chips, are looking as we start another week in paradise.

And finally, here is the lay of the land for some leading market indicators:

•     S&P/ASX 200 (XJO) at 5,497 points
•     ALL ORDINARIES (XAO) at 5,608.8 points
•     Dow Jones Industrial Average at 24,465.16 points
•     Gold (Spot) swapping hands for US$1,734.68 per troy ounce
•     Iron ore asking US$97.65 per tonne
•     Crude oil (Brent) trading at US$35.13 per barrel
•     Crude oil (WTI) going for US$33.25 per barrel
•     Australian dollar buying 65.35 US cents
•     10-year Australian Government bonds yielding 0.86% per annum

Foolish takeaway

Yet another week has passed us by on the markets, and the 'slow-but-steady' recovery the ASX has been experiencing since March continues. Although the markets feel calm (perhaps eerily so), it's worth remembering that the circumstances of the coronavirus pandemic remain fluid and the economy fragile. Investing with this in mind is prudent, at least in this writer's view. Still, it's great news to read about our economy opening up and life slowly returning to some semblance of normality.

As always, stay safe, stay rational, and stay Foolish!