A mixed close on the week for the ASX after rejecting the all-time high

February 21, 2020 - 1 month ago
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The Australian share market finished the week on a broad bearish tone as the global markets fell in all directions on Thursday, the benchmark S&P/ASX 200 Index slipped for the first time since Tuesday, after the two days of gains sent it into record territory.

The ASX 200 index fell -23.5 points or -0.33% to 7,139.0 on Friday after hitting a record high on Thursday, and at this point, presently asks questions on whether the bearish implications given from the posted shooting star on Thursday will strengthen, due to the rejection of Thursday’s all-time peak at 7,197.2.

The technical assessment currently displays a shooting star candlestick.
The shooting star candlestick is a chart formation consisting of a candlestick with a small real body, and a large upper shadow. The open, close, and low are near the low of the candlestick.

Although this candlestick identifies a potential market reversal, we first need confirmation to support the reversal.

However, failing to the close beneath the 7,130 did not give the bearish signal to the bearish call.

However, it is suggested to take note to this level (7,130), as we may still see the bears emerge from the woods and look down the pathway to a potential target of 7,050-70 if we manage to close beneath here.

Daily outlook on the benchmark S&P/ASX 200

Losses were rather broad-based as the market viewed significant falls among consumer discretionary, energy, IT and health.

Financials were the only sector to improve for the day. Despite the weakness today, local shares have still managed to climb over the week.

Gains for the major banks and insurer IAG helped minimise broader losses.

Out of the “Fab Four” (banks), the Commonwealth Bank added +1.08%, while ANZ rose +0.78%, and Westpac climbed +0.47%. NAB almost missed out but managed to eke out a +0.04% by the time the market closed.

Insurance Australia Group (IAG) lifted +1.8% while Qld based financial services firm, Suncorp Group (SUN) rose +1.1%.

The materials sector was a weight on the index despite a positive production report from Galaxy Resources, which gained +5.31%.

After yesterday’s muted gains, BHP and Rio Tinto slipped -0.78% and -0.46%, respectively.

Fortescue, however, slipped -1.23%, while Newcrest and Amcor reversed yesterday’s losses and rose +1.45% and +0.065% respectively.

Retail conglomerate Wesfarmers took a sudden course correction and lost -1.96%, while Tabcorp slipped -2.34%, while Crown Resorts fell -1.18%, and Domino’s Pizza lost -3.04%.

Biotech giant CSL declined -0.67%, and Cochlear plummeted -4.44% after hitting its own all-time high share price on Wednesday.

Healthcare provider Fisher and Paykel outperformed the sector after upgrading its profit guidance, sending its share price to a healthy +2.84% gain and also a new record-high close.

It was a better performance for smaller companies in the sector with homewares retailer Adairs (ADH) surging +7.9% after announcing record sales and profitability over the first half of FY20. Sales rose +8.6% to $178.9 million. Even Shaver Shop shined after surging +17%.

The specialty grooming retailer saw sales jump +12% to $107.5 million with net profit after tax (NPAT) up 16%.

It was a quieter day in terms of profit results after what was the busiest week of the February reporting season. Ardent Leisure (ALG), which owns Dreamworld, rose +4% even with its first-half net loss expanding to 22.5 million. It did manage to lift revenue by +16% to 263.2 million.

Village Roadshow (VRL) owner of Movie World and Sea World, fell -2% with a more significant than the expected net loss of $25.8 million and revenue falling 7%.

Both VRL and ALG believe the coronavirus outbreak is likely to impact earnings in the second half of FY20.

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