Well, ‘sell in May and go away’ would have been a far more profitable course of action for Australian investors (except for shareholders who stuck with the Commonwealth Bank) than most other markets – such as Wall Street, most Asian markets and their counterparts in Europe, which enjoyed a buoyant month.
In fact they all enjoyed a very nice May – the Russian market jumped 10% (but after big falls in earlier months). Oil and copper investors did better, but gold was tarnished by a big fall last week and for the month.
In Australia, the ASX 200 Index saw the tiniest of gains for May – 0.06% to 5492.5 points.
While technically it was the first rise in May in five years, for all intents and purposes it was flat, which I suppose isn’t a fall.
But some big stocks were weaker.
That microscopic gain now means the ASX had enjoyed two successive months of gains and the ASX 200 is up 2.3% for the year.
That’s not much given the S&P 500 in New York rose 2.1% in May alone.
What it does show is that the local market has been undermined by the falling iron ore price (which will hit the market today after the 4.1% drop on Friday night).
But given the size of the fall in iron ore prices this year of 32%, the 2.3% gain for the overall market is also testimony to the underlying strength in other parts of the markets – especially the big banks and the Commonwealth in particular.
Comm Bank rose 3.8% in May alone (to outperform the wider market’s five month effort). If anything, the CBA now has the lustre of a developing investment bubble – other bank shares were not as strong as they went ex dividend last month in the wake of the solid interim results.
On Friday, the ASX 200 fell 30 points, or 0.5%. Falling iron ore prices was the culprit.
The market will be facing a small fall this morning according to share price futures trading on Saturday, but the big iron ore fall and moves by the Chinese government to increase bank lending, could offset each other and limit the size of any drop.
Last week saw global share markets rise and in many cases added to gains in preceding weeks.
US shares gained 1.2% to 1.4%, Eurozone shares were up by around 1.5%, Japanese shares rose 1.2% and Chinese shares rose 0.2%.
Over May, the MSCI All-Country World Index jumped 1.8%, reaching the highest level in more than six years.
The All-Country World Index May around six points away from its all-time high reached in 2007.
And the MSCI Emerging Markets Index surged 3.3% over the month, its best gain since October and further confirmation that the sector is back in investor favour.
Asian stocks rose for a third week and the MSCI Asia Pacific Index posted a 3.2% for the month. That was one of the strongest monthly gains in a year.
In Europe, the Stoxx Europe 600 Index rose 1.9% in May and closed near the highest level since 2008.
Markets in India, Russia, Hungary and Argentina jumped at least 8%.
On the S&P 500, the 2.1% gain was helped by the return of investors to technology stocks, with Apple shares up 7.3%.
The S&P closed up 3.5 points, or 0.2%, higher on Saturday morning, our time to 1,923.57. The index added 1.2% for the week.
The Dow rose 18.4 points, or 0.1%, to 16,717.17. The Dow rose 0.7% for the week and 0.8% for the month.
And telling, the Nasdaq, which was the source of much of the weakness in April and early May, rebounded strongly.
While it fell 5.3 points, or 0.1%, to 4,242.62 on Saturday morning, our time, the tech ladened index ended 1.4% higher over the week and 3.1% in May.
The monthly gain was the index’s first in three months, confirming that for the moment investor blues over techs (including biotechs) have gone away.
Like the month, the ASX 200 was flat over the week thanks to the rise in the CBA and energy stocks offsetting the slide in iron ore prices.
In Australia, the CBA’s 3.8% share price rise stood out among the big stocks, while shares in Westpac fell 0.8%, the ANZ were down 1.7% and the NAB dropped 3.5% as investors pushed it to the bottom of the big four.
Telstra shares rose 3.7%, Woolworths rose 2.8% and Wesfarmers gained 1.4%.
Shares in Oil Search jumped 6.6%, Santos lifted 5.9%, Woodside shares were up 3.3% and Origin Energy added 1.7%.
The energy sector was up 3% and was the best performed sector in May as world oil prices rose.
Takeover offers from China helped make Aquila Resources the best-performing stock on the market with a 38.8% leap, while copper and gold miner Panust soared 37% as well on a separate Chinese bid.
Small gold miner Regis Resources was the worst-performing stock, with its shares down 36% after a poor exploration report.
And among May’s market floats Spotless Group rose 15.5% to $1.85, and Genworth Mortgage Insurance was up 19.2% to $3.16.
