Live Markets, Friday May 21, 2021
Gains in the tech and healthcare sectors helped the Australian market stay ahead on Friday and drove the market’s weak weekly gain.
The ASX 200 added 10.7 points or 0.2% in its weekend session to close at 7,030.3.
Biotech giant CSL added 2.2% to $ 284.30, its best result in three months. Other names in the healthcare sector ResMed and Fisher and Paykel rose 3.1% and 2.8% respectively.
The tech sector was also strong to grow a collective 1.6 percent.
Buy now, pay later, Afterpay company fell slightly and Appen lost 5.1%, but EML Payments rebounded with an increase of 15.8% and Nuix, Xero, Altium and Wisetech Global also rose.
Mines and energy stocks were again weak as commodity prices continued to cool.
Resource-related stocks – including iron ore giants BHP Rio Tinto and Fortescue Metals – have been a big drag on the larger exchange this week.
The Commonwealth Bank also retreated from yesterday’s record close, while online retailer Kogan.com plunged 14.3% to $ 8.70 on lower profits.
The ASX 200 was 16.1 points ahead for the week, adding 0.2% over the five sessions.
While seemingly narrow, the weekly rise comes after the market recovered ground from Wednesday’s $ 41 billion drop.
Gary Glover, senior client advisor at Novus Capital, said low trading volumes in the United States and Australia indicated that it was becoming increasingly difficult to find value in a market that had become quite expensive.
“In recent months there have been fewer and fewer participants … it just means it’s a bit more volatile there,” Glover said.
“You can say ‘hey, we’re going up’, but you want to see more people in the market while it’s doing it.
“We’re also seeing higher volumes on down days, which tells me there’s a bit of caution in the market.”
Iron ore prices have cooled from record highs last week, with traders spooked by moves in China to keep a lid on the steel industry’s key ingredient.
Oil also fell when Iran signaled that it would soon be free from various sanctions on oil, banking and shipping.
Inflation fears persisted on Wall Street earlier in the week and also fueled a midweek sell-off in Australia as investors again nervous, the strength of the rebound in the global economy will force central banks to pull back. withdraw the generous support measures that have favored the stock markets.
Commonwealth Bank Australian Director of Economics Gareth Aird said this week’s data dump added weight to the idea that wages and inflation would be stronger than the Reserve Bank planned.
The wage price index was better than expected, while the unemployment rate fell in April as underutilization fell to its lowest since December 2019.
“Everyone in the RBA should be very happy with this week’s national economic data,” Mr. Aird said.
“There is still a long way to go. But to date, things are moving in the right direction and at a pace which, if sustained, means the RBA is likely to meet its dual goal of full employment and inflation sustainably within the target range. sooner than his forecasts currently predict.