Australian shares recorded their second large monthly gain in a row in February to be up nearly 9.3% after the first two months of 2019.
That is considerably better and more than the 6.8% slide in the market over all of 2018.
The Aussie dollar dipped 1.2 US cents over the month to 71.46 at the close in Sydney last night while the 10-year treasury bond fell 12 points over the month to 2.10% as investors punted on the Reserve bank making one or two rate cuts this year.
By the close of trading yesterday February saw the ASX make the largest monthly percentage gain since July 2016, thanks to a better than anticipated banking and finance royal commission final report, a good month for commodities (including iron ore and copper) and a spate of share buybacks and mostly OK December half and full year results.
The ASX 200 Index closed the month 304.4 points, or 5.2%, higher at 6,169 while the broader All Ordinaries rose 315.4 points, or 5.3%, to 6,252.7. That was after a 4.1% rise in January.
The major miners led the way after solid interim or full-year financial results.
BHP shares jumped 6.9% to $37.23, Rio Tinto shares surged 10.5% to $96.16, South32 shares were up 10.8 to $3.91, Fortescue Metals shares added 7.3% higher at $6.06 and OZ Minerals shares jumped 5.5% to $10.30.
The big banks shook off the Hayne Royal Commission blues and enjoyed solid gains because the final report left their business models unaltered.
Commonwealth Bank shares rose 5.8% to $73.95, ANZ shares surged 11.9% to $28.00 and Westpac climbed 9.8% to $26.96. NAB’s shares managed a more modest 5.3% gain to $25.13 after it lost its chairman and CEO in the week after the royal commission’s final report was released at the start of the month.
AMP shares rose a modest 4.4% to $2.36, but shares in wealth manager IOOF surged more than 30% to $6.58 despite losing the chairman, CEO and three other senior executives late last year as ASUC launched legal action.
Amongst the techs, Appen shares soared 46.7% to $23.41 for the month, after a solid interim result and optimistic revenue forecast lifted the tech stock higher. Afterpay Touch shares were up 15.9% to $4.54 and Atlium jumped 32.3% to $33.00.
In contrast shares in cargo tech group, WiseTech Global fell more than 5% to $19.26, despite a solid interim followed by a $93 million takeover of a Singapore trade tech company which worried some in the market.
Breville Group was a surger last month – the shares up 43.4% to $15.75 in February after a better than expected interim report and good growth in Europe and the US. Harvey Norman – which reported a moderate result yesterday) saw its shares jump 6.8% over February, but rival JB Hi-Fi which did better in the December half, saw its shares fall 3%.
Caltex Australia shares rose 6.5% after it announced a buyback and a moderate result this week
Blackmores plunged 27.7% to $93.25 after sales fell in China and the company warned of a weak full-year result. The company also lost its CEO in the last week of the month.
Bellamy’s shares (it reported this week) saw its shares slide 6.3% but a2milk was again a star with a 14% gain for the month.
Shares in Qantas rose 5.3%, Virgin Australia, 11% but Air New Zealand shares lost 11.5% after a big earnings downgrade that was confirmed yesterday. Higher fuel prices were a bugbear in the December half year.
Among media stocks, the reporting season saw a rebound in previously weak shares. Nine shares leapt 17% to $1.71, Southern Cross shares were up16.2% to 41.22 but Seven West media shares dragged the chain, only adding 0.9% to 55 cents.
Iron ore prices were flat or fell last month despite an early boost from Vale’s January 25 mine disaster in Brazil.
The metal Bulletin’s Index price for 62% ore was flat in February after a 2.1% rise on Thursday to $US85.29, ending a six day losing streak
But over the month, the price of 65% fines shed 5.5% (Vale’s favoured high grade ore) while 62% were flat.
In contrast, 58% fines jumped 12.1% which was good news for the likes of Fortescue because that is still its core product, even though it is building a higher grade mine in the Pilbara and now shipping 61% Fe ore.
