Investors had better get used the higher influence movements in the BHP share price will have on the performance of the key index, the ASX 200 – and of course the performance of investor funds as well.
The first day of trading in reunified BHP shares under the sole ASX listing was a reminder of where the real weight lies when it comes to the ASX 200’s daily, weekly, quarterly and yearly ebbs and flows.
BHP now accounts for a mammoth 10.9% of the ASX 200 – compared to its previous weighting of 6% – according to Morgan Stanley.
The ASX 200 started Monday with a 0.8% tumble (much larger than the 16-point fall implied by the futures market on Friday night, and a fall that also ignored the big late rally on Wall Street).
The index recovered as investors shrugged off their early negative bent and the index ended the session down just 0.2% at 6971.6 points.
But the 1.2% fall in the BHP share price (to $46.35) trimmed 9.7 points off the index which fell 16.5 points.
The selloff in the banks didn’t help either as investors rebalanced their portfolio weightings to take account of the higher share for BHP.
CBA shares fell more than 2%, NAB shares were off 1.9%, ANZ Bank shares lost 3.4% and Westpac shares lost 1.6%.
BHP was also the most traded stock with 37.5 million shares changing hands on Monday, a tenth of the 337 million traded on Friday.
Being the last day of the month, volumes were also high for the usual window cleaning. Investors also positioned themselves ahead of the Reserve Bank board’s first meeting today which will see the end of its $4 billion bond buying campaign.
Governor Lowe is due to speak to the National Press Club on Wednesday and the central bank releases its first quarterly monetary policy statement on Friday.
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The ASX 200 slumped more than 6.3% in January, the largest monthly loss since COVID-19 started years ago. That’s despite an 11.7% rise in BHP shares during the month.
