The S&P/ASX 200 Index (ASX: XJO) has endured one of its more volatile weeks in recent months last week as ASX 200 bulls and bears struggled for control. The ASX 200 remains above the psychologically-important 6,000 point threshold, but only just — closing at 6,024 points last Friday. That was despite the ASX 200 touching a low 0f 5,991 points on Monday, and a high of 6,160 points on Tuesday.
The latter represents the highest point the index has touched since the coronavirus pandemic smashed global markets back in March, giving you some idea of how wildly the markets were swinging last week. Between Monday afternoon and Tuesday morning, ASX 200 shares gained more than 2.7%. Conversely, between Wednesday morning and Thursday afternoon, the markets gave back around 1.5% of those gains.
By market close on Friday, the ASX 200 'only' lost 0.16% for the week. But it was open warfare between ASX bulls and bears in the meantime.
Vaccines and deficits
Sentiment surrounding possible developments of a coronavirus treatment or vaccine, as well as an extension of government stimulus programs, were the primary positive influences for the ASX last week. We heard from both the United Kingdom-based company AstraZeneca and the United States-based Moderna that progress is being made on a potential treatment or vaccination for the coronavirus, which is of course extremely exciting news.
On the other hand, coronavirus cases in Victoria continue to be at highly concerning levels, and the situation in New South Wales also remains fluid. This put a dampener on the vaccine excitement from earlier in the week and was the main factor pulling the ASX 200 back to Earth from Wednesday onwards.
We also got a sobering fiscal update from the Treasurer last Thursday. Markets initially applauded the government's decision on Tuesday to extend its JobKeeper and coronavirus supplement safety net payments until at least March 2021 (albeit with reduced and tiered payment rates and tightened eligibility). But the reality of an almost-unfathomable $85.8 billion budget deficit for the 2020 financial year (and a projected deficit of $184.5 billion in FY21) also began to sink in.
All in all, it was a week of high drama in multiple arenas last week, and the market responded with some drama of its own in turn.
How did the markets end the week?
As I flagged earlier, the ASX 200 ended the week 0.16% in the red after starting out at 6,033.6 points and closing on Friday at 6,024 points. Monday saw a 0.5% slump, whereas Tuesday brought the punch back to the party with a 2.6% gain. But Wednesday saw the bears regain control with a 1.3% slide. Thursday saw a modest 0.3% gain, but Friday sealed the week's red fate with another 1.1% loss.
Meanwhile, the All Ordinaries (INDEXASX: XAO) also had a flat week, starting at 6,144.9 points and finishing at 6,148 points for a week-to-week gain of 0.05%.
Which ASX 200 shares were the biggest winners and losers?
Time for things to get interesting with our weekly winners and losers. As per usual, we shall start with the losers:
Worst ASX 200 losers |
% loss for the week
|
| Alumina Limited (ASX: AWC) |
(7.2%) |
| Cooper Energy Ltd (ASX: COE) |
(7.1%) |
| Western Areas Ltd (ASX: WSA) |
(6.6%) |
| TPG Telecom Ltd (ASX: TPG) |
(6.1%) |
Well, today we have 2 'hero-to-zero' shares (not literally zero) in Alumina and Cooper Energy, who both made the previous week's winners list. There appeared to be no major news out of either company last week, so we can probably put these large losses down to investors taking some profits off the table after strong gains the week prior.
Western Areas is a nickel producer who gave a disappointing market update on Friday.
The newly merged TPG was also on investors' hit list. Perhaps, with nothing to look forward to (specifically in the mergers and special dividends department), investors have gotten bored of the newly-wed telco.
Now let's take a look at the winners from last week:
Best ASX 200 gainers |
% gain for the week
|
| Resolute Mining Limited (ASX: RSG) |
17.2% |
| AP Eagers Ltd (ASX: APE) |
16.8% |
| Orocobre Limited (ASX: ORE) |
13.2% |
| QBE Insurance Group Ltd (ASX: QBE) |
11% |
ASX gold miner Resolute takes out last week's crown with a hefty gain. Investors were keen to get hold of Resolute shares after the company reported a positive quarterly update with increased gold production. A near-record high gold price wouldn't have hurt either.
Car dealership owner AP Eagers was also in favour after some positive brokering coverage.
Lithium miner Orocobre was also a buyer target, despite this company's volatile performance in 2020 so far and no real news being released last week. Orocobre shares are now up more than 70% since May, so perhaps this is a case of investors jumping on an accelerating train here.
What is this week looking like for the ASX 200?
It continues to be a moving arena for ASX shares, so (frankly) who knows what twists and turns this week will bring. For a start, all eyes will continue to be on coronavirus case levels in Australia (and particularly Victoria) as we start a new week.
The Aussie dollar also continues to shine, so it will be noteworthy to see whether it climbs above its current ~71 US cents level this week.
Turning to ASX 200 shares, we saw some fairly heavy selling of ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) on Friday, so it will be interesting to see how the banks open this week. Insurance giant Insurance Australia Group Ltd (ASX: IAG) announced it would be the latest ASX 200 share to cancel its dividend on Friday – highlighting what a perilous year 2020 has been for dividend investors so far.
And I'll personally be keeping an eye on the gold price as it approaches the all-time high of US$1,920 per ounce it hit back in 2011.
Before we go, here is a look at how the major ASX 200 blue chip shares are looking as we prepare for the new week:
ASX 200 company |
Trailing P/E ratio |
Last share price |
52-week high |
52-week low |
| CSL Limited (ASX: CSL) |
44.65 |
$277.02 |
$342.75 |
$215.24 |
| Commonwealth Bank of Australia (ASX: CBA) |
13.22 |
$72.86 |
$91.05 |
$53.44 |
| Westpac Banking Corp (ASX: WBC) |
13.33 |
$17.76 |
$30.05 |
$13.47 |
| National Australia Bank Ltd. (ASX: NAB) |
16.14 |
$17.98 |
$30.00 |
$13.20 |
| Australia and New Zealand Banking Group Limited (ASX: ANZ) |
12.45 |
$18.29 |
$28.79 |
$14.10 |
| Woolworths Group Ltd (ASX: WOW) |
19.23 |
$38.63 |
$43.96 |
$32.12 |
| Wesfarmers Ltd (ASX: WES) |
24.04 |
$46.36 |
$47.42 |
$29.75 |
| BHP Group Ltd (ASX: BHP) | 14.24 |
$37.08 |
$41.98 |
$24.05 |
| Rio Tinto Limited (ASX: RIO) |
15.06 |
$102.92 |
$107.79 |
$72.77 |
| Coles Group Ltd (ASX: COL) |
20.00 |
$17.78 |
$18.32 |
$13.10 |
| Telstra Corporation Ltd (ASX: TLS) |
19.21 |
$3.33 |
$4.01 |
$2.87 |
| Transurban Group (ASX: TCL) |
162.03 |
$13.70 |
$16.44 |
$9.10 |
| Sydney Airport Holdings Pty Ltd (ASX: SYD) |
30.18 |
$5.40 |
$9.30 |
$4.37 |
| Newcrest Mining Limited (ASX: NCM) |
33.98 |
$34.60 |
$38.87 |
$20.70 |
| Woodside Petroleum Limited (ASX: WPL) |
40.82 |
$20.99 |
$36.28 |
$14.93 |
| Macquarie Group Ltd (ASX: MQG) |
14.80 |
$125.79 |
$152.35 |
$70.45 |
And finally, here is the lay of the land for some leading market indicators:
- S&P/ASX 200 (XJO) at 6,024 points
- All Ordinaries (XAO) at 6,148 points
- Dow Jones Industrial Average at 26,469.89 points after falling 0.68% on Friday night (our time)
- Gold (Spot) swapping hands for US$1,901.30 per troy ounce
- Iron ore asking US$105.59 per tonne
- Crude oil (Brent) trading at US$43.42 per barrel
- Crude oil (WTI) going for US$41.34 per barrel
- Australian dollar buying 71.03 US cents
- 10-year Australian Government bonds yielding 0.86% per annum
Foolish takeaway
After last week's swings, I'm reminded how much short-term sentiment can sway the ASX 200 sharemarket — and equally how little these short-term swings really matter in the long-run. So don't let volatility get you down Fools! It's our constant reminder that the share market is a place where cool heads always prevail in the end. So, as always, stay safe out there, stay rational and stay Foolish!
