The final trading session of the financial year on Wednesday ended like so many have in the past year – an early spurt in reaction to what happened in offshore markets – especially Wall Street and a few strategic commodities such as iron ore, gold and oil – and then the slow fade to the finish.
The ASX 200 rose 24% in the year to June, while the All Ordinaries was up by more – 26.4% is the most since 1987, before it all came undone in the Black Monday crash in October 1987.
Year to date, the ASX 200 has risen 11%, so the second half performance was weaker than the first.
It was the strongest financial year gain for the ASX 200 since it started in March 200 and topped the gains seen in 2006-07 in the early lead up to the GFC in 2007 and 2008.
On rare occasions shares prices surged and continued rising through the session – on other days (much fewer than in the closing months of 2019-20) prices fell and went on falling.
A year ago the bears ruled and when they growled, the market cowered in fear. A year on the it’s the bulls that are running things.
Covid and the pandemic were constant threats to the markets – and the driver in many ways as retail sales busted, then boomed – especially on line.
In the year to May retail sales were up 7% over the year, unemployment was 5.1% in May which was the level before Covid hit at the start of 2020 but the number of new jobs regained and created was higher as employment topped the pre-covid level.
Commodity prices were crunched in early to mid-2020 and have recovered to new all-time highs for some such as copper and iron ore.
The ending of the drought saw a rebound in the rural sector – shares in Elders and GrainCorp surged. Elders shares rose 20% over the financial year while GrainCorp shares were up 26%.
Wednesday June 30 saw the ASX 200 close at 7,313 points, a gain of 0.2% (11 points) after being up as much as 0.9% earlier in the session.
The ASX 200 peaked in mid-June at 7,406.2 (June 16) and rose above $2 trillion for the first time, and remained there.
The performance of the ASX will be great news for most super fund members who a year ago were withdrawing billions of dollars and worried about their jobs.
Now the concerns are Covid (continuing), shares are booming, (and outperforming house prices) and looking to do a bit more.
For example in the year to May, house prices were up 10.6% but the ASX was up 24% for the year and 11% for the year to June 30.
The Aussie dollar ended the financial year up against the greenback and on the trade weighted index against all major currencies.
The Dollar ended at 75.18 US cents on Wednesday, according to the Reserve Bank, up 6.4 US cents over the year or more than 9%. The TWI ended at 62.7 against 60.1 a year ago.
The yield on the key 10-year bond ended at 1.52% on June 30, up 66 points from the sub 1% record lows a year ago.
The next best performers (so far) are lithium miner, Pilbara Minerals, which is up 472%, and rare earths group, Lynas, up 200%.
Losers included Nuix – the failed float last from last December which is on its way to be a headline grabber with ASIC investigating the company and its pre-float disclosures and accounts.
Nuix prices lost 73% of their value in the wake of the float last December and then the price collapsed this year on multiple downgrades and management and board instability.
But if you had to pick a sector that held the market aloft after faltering for the six quarter and a bit, it was the big four banks.
The Commonwealth enjoyed a gain of 43%, Westpac, 42%, NAB, 41% and the ANZ was the best performer with a 49% surge.
Iron ore prices more than doubled to well above $US200 a tonne for 62% fe fines delivered to northern China.
Copper prices surprised with a big surge from the lows of early 2020 – they were up around 55%, oil prices also jumped with returning demand.
BHP shares jumped 36%, Rio Shares were ip 30% but iron ore specialist, Fortescue saw 70% surge in its share price, making founder and chairman, Andrew Twiggy Forrest very, very rich.
And finally, the company on everyone’s wish list – and in a lot of wallets of consumers – Afterpay enjoyed a 90% gain in 2020-21 but at one stage the shares were up 260% at a peak of $160.
This year there is a clear ‘best performer’ on the ASX200 – mining explorer Chalice Mining. This stock is up 647% in the past year and ended the year with a gain of 4.6% on June 30.
