An unprecedented roller-coaster week, as the ASX posts the worst week in more than 11 years

March 20, 2020 - 2 weeks ago
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The bearish tones echoed throughout this week for the Australian share market as it closes on its worst week since October 2008 as fears over the economic effects of the coronavirus inflict havoc across the global markets.

Despite the modest gain, the benchmark S&P/ASX 200 Index still dropped -798 points, or -14.41%, (high-low of the week) and wiped out a whopping $703.3 billion off the boards in the last four weeks.

In today’s action, the benchmark S&P/ASX200 finished the Friday session up +33.7 points, or +0.7%, at 4,816.6, while the broader All Ordinaries index gained 44.9 points, or 0.93 per cent, to 4,854.3.

The ASX 200 had many twists, turns, dives and jumps this week, as it dodged many events.

Central banks being the key event, (in no order), the U.S. Federal Reserve, the European Central Bank (ECB), the Reserve Bank of New Zealand, Bank of England all cut rates.

Back home, the Reserve Bank of Australia (RBA) held an unscheduled emergency meeting on Thursday and cut its cash rate for the second time in a month to 0.25% and for now, is the RBA’s last cut for the meantime having recently flagged that it would not lower the cash rate below this threshold.

Out of the major banks, only the ANZ was the only bank to pass on the RBA rate cut to its variable mortgage customers; however, all Fab Four” (banks) cut fixed-rate mortgage rates.

Three of the “Fab Four (banks) gained on Friday, after falling to their lowest levels in decades over the past couple weeks.

The ANZ finished up +6.8% to $16.02, while NAB rose +7.5% to $15.66 and Westpac gained +8.5% to $15.77.

Commonwealth Bank – which has not suffered as steep losses as the other three – fell -1.7% to $59.91.

CSL was also a major weight on the index, declining -13.9% to $270.15.

Property trusts were the biggest risers on Friday, jointly up +8.9% after the sector suffered a massive -43.9% plunge over the previous 11 sessions.

For the week, Transurban plummeted -20.9% to $10.30, Scentre Group nosed-dived -37.1% to $1.63, Goodman Group lost -16.8% to $11.45, Stockland dropped -46% to $2.15, Mirvac Group slid -27.6% to $1.96 and GPT Group fell -34.2% to $3.37.

Companies exposed to the aviation and tourism sector also felt the heat from the bears as governments worldwide adopted strict border control measures, and airlines slashed flights.

Flight Centre tumbled a whopping -48.3% to $9.91, Corporate Travel Management fell -41.7% to $5.39, while Qantas dived -25.8% to $2.36 and Virgin Australian fell -30.4% to $0.055.

Meanwhile, Crown Resorts fell -25.4% to $6.12, Star Entertainment Group dropped -38.6% to $1.62, and gaming machine manufacturer Aristocrat Leisure tumbled -35.7% to $17.94.

The energy sector gained +4.5% as the price of oil surged +24% on Thursday displaying its biggest one-day gain on record, as it recoups back more than half of the losses witnessed on Wednesday.

The rebound was on the heels of three straight days of selling, including Wednesday’s -24% plunge that took (WTI) to the lows posted back in 2002 at $20.45. It was WTI’s third-worst day on record.

Santos climbed +10.9% to $3.05 and Oil Search was up +15.3% to $2.34, while Woodside Petroleum rose +0.6% to $16.

Woolworths dropped -6.1% to $37.47, Wesfarmers fell -4.6% to $33.28 and CSL dropped -4.6% to $270.88.

Telstra fell -6.1% to $3.07 after announcing it was freezing its job-cutting program for six months, suspending late payment fees and disconnections and inviting stood-down Qantas employees to apply for 1,000 temporary jobs to help virus-proof the economy.

Afterpay shares went on a wild roller-coaster ride through the week as the buy now, pay later provider managed to display a strong rally and climbed +25.7% on Friday, its shares closed the week -45.5% lower at $12.67.

Major miners were firmer through the week despite base metal prices falling. Fortescue Metals Group rose +5.9% to $10.52, BHP Group climbed +1.8% to $27.19 and Rio Tinto added +0.8% to $81.70.

As for the Australian Dollar, the bulls have staged a firmer stance since the Thursday’s RBA rate cut, after prices hit a fresh near-18-year low of US$0.5507 before rebounding sharply and currently buys US$0.5945 (as of writing).

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