The Australian sharemarket opens December with a small loss pencilled in after Wall Street weakened on the final day of a record-breaking month.
The ASX futures market was showing a loss of around 5 points just after 7 am as Wall Street saw falls across the board for most of the session, until the final hour and a bit when the Nasdaq turned higher and falls in gold and oil eased.
That was after the ASX fell for a third straight session on Monday as the strong Aussie dollar weighed on exporters and the absence of a firm lead from Wall Street saw some not unexpected profit taking by investors.
But the ASX remains at nine-month highs after a stellar November.
While the benchmark S&P/ASX200 index was down 83 points or 1.26% at 6,518 and the All Ordinaries Index dropped 1.1% to 6,742. It was the best month on the ASX in 32 years.
The ASX 200 rose 10% for November – its best month since the launch of the ASX200 in March 2000.
There hasn’t been a monthly gain this big since the All Ords jumped 13% in March 1988, five months after the Black Monday crash in October 1987 when the All Ords fell 25% in a day.
The surge was mostly due to the US elections result with the win by Joe Biden and the loss by the highly disruptive Donald Trump. Overlaying is was the good news about a trio of vaccines for COVID-19 which sparked a major rotation out of Megatech growth stocks and back into value-driven (and in many cases, dividend-paying) industrials, financials and other more traditional stocks.
In Australia, the biggest beneficiaries of this rotation were the big banks.
Though the ASX’s financial sector fell 1.5% on Monday it was still up more than 15% in November as investors rediscovered their old favourites.
Many of the banks reached multi-month highs last week with the Commonwealth Bank shares up 14.6% for the month, NAB shares rising a massive 23.01%, ANZ shares 20.4%, and Westpac, 12.4%.
Among the materials sector, BHP hit a three month high last week and was up 12.7% for the month as oil prices surged more than 25%, iron ore prices rose 12% and copper added more than 12%.
Rio Tinto was up 9.7% thanks to the rises in iron ore and copper, but Fortescue Metals underperformed the index with a gain of just 5%, having had its big run-up earlier in the year.
Iron ore prices ended November above $US130 a tonne for the first time this year at $US131.63, a gain of $US2.01 on the day and 12% for November from October 30’s close of $US117.49.
