Last week continued the turbulent ASX volatility we have been living with for the past 3 months. The S&P/ASX 200 Index (ASX: XJO) initially rose by 1.7% or 90 points on Monday, then fell by 3% by Wednesday. The week provided investors with ASX 200 winners and losers.
The overall sentiment was driven by 2 emerging issues. The US reported a weekly jobless claims total of 2.981 million, which brings the jobless number to a post-war high of 36.5 million. In Australia, the unemployment rate rose to 6.2% with the government anticipating a peak of 10%.
Added to this were escalating tensions between the US and China, combined with Chinese bans on Australian exports and uncertainty over our trading relationship.
ASX 200 winners
The ASX 200 winners were drawn predominantly from commodities producers and in particular, the ASX gold miners.
The Graincorp Ltd (ASX: GNC) share price rose by 12.93% over the week. The company reported a $58 million dollar half-year profit due to the easing of the drought. Investors have praised GrainCorp for the demerger of its malt producing arm, now United Malt Group Ltd (ASX: UMG), and selling off its bulk liquid terminals business. A stripped-down GrainCorp, with a strong insurance arrangement in place to manage drought, is a core industry in times of crisis.
All ASX gold mining large caps rose over the week, continuing the long-term historical trend of the gold price rising as share prices fall. Among the ASX 200 winners were Saracen Mineral Holdings Limited (ASX: SAR) with a massive 13.22% share price rise, Regis Resources Limited (ASX: RRL) with a rise of 11.16%, and St Barbara Ltd (ASX: SBM) with an 11.03% increase.
Ramsay Health Care Limited (ASX: RHC) had a week that reflected market sentiment. On Wednesday, 13 May, the company’s share price tumbled by 3%, yet it regained momentum to finish the week up by 5.3% from Monday’s opening price. Ramsay announced on Friday, 15 May a binding heads of agreement with New South Wales. This was a commitment to make its facilities available during the COVID-19 pandemic. A similar deal already exists with Queensland.
ASX share price falls
As well as the ASX 200 winners, the market also claimed several losers. Falling share prices last week centred on shares in the real estate and bank sectors. The Commonwealth Bank of Australia (ASX: CBA) released a housing sector prognosis with its Q3 trading results. This noted a forecast for housing prices to drop between 11% and 32%.
Correspondingly, we saw shares fall across the ASX real estate investment trusts and related real estate businesses. Scentre Group (ASX: SCG) saw its share price fall by 10.18%, Mirvac Group (ASX: MGR) saw a fall of 7.62%, and real estate sales website REA Group Limited (ASX: REA) saw its shares fall by 5.85%. Accordingly, we also saw share price falls across the banking sector averaging about 4%.
The Xero Limited (ASX: XRO) share price also fell by 8.79% over the week. Despite producing the company’s first profit report, Xero investors remain skittish. As an accounting provider to small and medium enterprises, the market is expecting it to take a hit at some point. There also appeared to be some sentiment opposed to diverting spending from customer growth.
Lastly, Alliance Aviation Services Ltd (ASX: AQZ) saw its share price drop by 6.64% despite being one of the few airlines still operating. The Alliance share price was hit by news of the aspirations of Singapore-backed Regional Express Holdings Ltd (ASX: REX) to fly between capitals. The Queensland government also frightened the horses with its ambitions to enter the aviation market as a bidder for Virgin Australia Holdings Ltd (ASX: VAH).
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More reading
- ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
- How this $70m ASX small cap is cutting down a $50bn industry
- 7 roaring ASX mid-cap shares last week
- ASX 200 up 0.25% this week, CBA reveals Q3
- Top brokers name 3 ASX 200 shares to sell next week
Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended Ramsay Health Care Limited, REA Group Limited, and Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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