Australian shares look like starting the new financial year on a positive footing, unlike Friday’s nasty sell off which wiped close to $30 billion from valuations with a slide of more than 96 points.
There’s likely to be a rise of around 20 points for the ASX 200 after futures trading ended for the week early Saturday morning.
The ASX’s financial year was literally a year of two halves – the strong out performance in the six months to December thanks to the boom in iron ore, coal and oil prices which saw solid gains – some double digit for key stocks such as BHP, Rio and the banks, CSL, BlueScope and Whitehaven.
That was followed a miserable second half where the ASX 200 peaked on May 1, then slid right to the end of June.
That left the ASX 200 up 9.50% for the 2016-17 financial year (it was over 10.5% on Wednesday), up nearly 1% for the quarter, down 2.45% for June and a mere 0.1% for last week. For the year to date it was up 0.98% which is behind inflation in the period of around 2%.
According to S&P the ASX 200 was up 14% in 2016-17 after dividends, which is more than respectable.
Both Rio Tinto and BHP starred, up 37.6% and 23.6% respectively over the year to Friday. But while BHP is down 7.1% in the six months to June 30, Rio shares were up 5.6%.
It seems the agitation of US vulture fund, Elliott Advisers in BHP was a big negative for BHP shares in the June half year. BHP shares fell more than 3.5% in the June quarter while Rio shares rose more than 4%. Both had to battle weaker iron ore prices.
Fortescue Metals shares jumped nearly 44% in the year to June, but shed 16% in the quarter and more than 11% in the six months to June. The month of June saw a 9.8% jump as iron ore prices recovered last week, driving Fortescue shares up by more than 12%.
Investors in Whitehaven Coal almost tripled their money, with the shares surging 157% in the year. A2 Milk rose 119.2%, while BlueScope Steel and Qantas shares more than doubled in value with gains of 104% and 107% respectively.
But defensive stocks like Westfield and Telstra have had a terrible 2016-17, they fell 23.3% and 21.8% respectively.
Over the year the main drivers of the market – the four big banks all had good growth – the Commonwealth rose 12.1%, Westpac could only manage a 4.2% , the ANZ jumped 19.9% and the NAB saw its shares rose 17.1%.
But all the growth came in the six months to December 31. The first half of this year saw NAB shares down 3.5%, Westpac shares lost 6.4%, the ANZ saw its shares drop 5.6% and the CBA had the best performance with shares up 0.50%.
That was due to the federal levy announced in the budget in May and then the South Australian tax in June. So Westpac shares fell 13% in the June quarter, NAB shares were down more than 11%, ANZ fell 9.7% and the CBA “out performed’ with drop of just 3.6%.
A combination of a steadier day on Wall Street and Europe, an easing in the taper tantrum and another surge in iron ore prices (which pushed them up more than 14% last week), means the ASX 200 will start around 20 points higher this morning.
The US is off tomorrow night for Independence Day (which means a hiatus to trading tomorrow and Wednesday) and locals will take the market higher today and then mark time unless iron ore prices sell off.
There’s no prospect of an interest rate change at tomorrow’s Reserve Bank meeting for July, and the big data release globally is the June jobs and employment figures from the US on Friday night.
Eurozone shares fell 0.5% on Friday, despite the steadier tone to trading, but the US S&P 500 gained 0.2%.
Eurozone shares down 2.6% for the week, against falls of just 0.6% in the US and 0.5% in Japan. Chinese shares actually rose 1.2%.
Wall Street ended last week, June, the quarter and the first half of 2017 on a mostly positive note, ending in the black on Friday and finishing the quarter with modest gains.
The S&P 500 was up 0.2 per cent at Friday’s close to 21,350.7. For the quarter, the benchmark equity rose a 2.6% its seventh consecutive quarter in the black. For June it was down 0.6%, but up 2.5% for the quarter and 8.2% for the first half of 2017.
The Dow ended up 0.3% on the day, to 21,350.6, up 3.3% over the quarter, and boasting its seventh straight quarter in positive territory. It is up more than 8% for the year so far.
The Nasdaq, was little changed by Friday’s close to 61,40.42. It rose 3.8% for the quarter, its fourth straight quarter of gains. It lost 2% last week, gained 2.6% for June and is up a very robust 14% for the year to June 30.
In Europe, the Stoxx 600 had a red ink week, month and quarter – down 2.1% last week, 3.3% for June and nearly half a per cent for the quarter. The index is up just on 5% for the year so far.
Underlining the shakiness of big cap tech stocks Google’s parent Alphabet fell nearly 6% last week, Amazon shed 3.6% and Facebook fell 3.6%, Apple was down 1.5%.
