Australian shares are looking at a small loss when June trading on the ASX resumes later this morning, but higher oil, gold, and iron ore prices and renewed confidence in the banks might see that erased and the market move into the green.
Friday saw eurozone shares lose 1.3%, but US shares recovered from a 0.9% slide after President Trump’s relatively mild moves against China were announced resulting in the S&P 500 ending half a percent.
Despite the positive US lead, ASX 200 futures fell 24 points, or – 0.4%.
After the Friday sell-off which saw the index lose 1.6%, the weak futures trading finish on Saturday morning is understandable, but any sell-off today will be limited, thanks to the strong gains for oil, gold, copper, and iron ore (See separate stories).
The continuing impact of COVID-19 will still be an issue, as will trade tensions between China and the US – stirred up by China’s crackdown in Hong Kong and Donald Trump’s attempts to use that to distract attention from his mishandling of the pandemic and the rioting across the US where his comments have been inflammatory, not calming.
The Aussie dollar closed at 66.67 US cents on Saturday morning in the US, up one and a half cents over the month.
The question now is whether the Australian sharemarket has any more gas left in it after it had its best week in eight last week, even after Friday’s profit-takers.
ASX 200 shed 95.4 points, or 1.63%, to close the month at 5755.7.
Despite the end of week loss, the ASX 200 managed a 4.7%, making it five straight weeks of gains for the first time since the outbreak of the COVID-19 pandemic.
The ASX has now finished higher in nine of the past 10 weeks and has rallied 30.7% since hitting a multi-year low 4,402.5 on March 23.
The market has now recovered to where it was on March 11 but is still down 13.9%.
For May the market was up 233.3 points or 4.2%, meaning last week’s surge produced all the gains for the month and reversed a small impending loss prior to trading starting last Monday.
That was all down to the big banks – the financial sector sub-index fell 3.6% on Friday but was still up 11.1% for the week.
The Commonwealth Bank lost 3.03% on Friday but was up 8.8% for the week. Westpac shed 6.36% on Friday but added 14.7% for the week; the NAB dropped 5.2% daily on Friday but will still up 16.1% for the week and the ANZ shed 4.5% on Friday to leave it still 17.4% higher.
