The S&P/ASX 200 (Index:^AXJO) (ASX:XJO) has risen 4.5% over the last month, having broken to the upside from its previous four-month trading range. The 6,000 mark is now firmly in sight, a technical level that the index hasn't been able to overcome since 2008.
Three upcoming market announcements that I believe will determine whether the ASX 200 pushes above 6,000 in the near-term are:
- National Australia Bank Ltd (ASX: NAB) full year results announcement 2 November
- Westpac Banking Group (ASX: WBC) full year results announcement 6 November
- Commonwealth Bank of Australia (ASX: CBA) first quarter trading update 8 November
The Big 4 banks comprise around 25% of the ASX 200 and movements in their share prices greatly impact the broader index level. NAB and Westpac have been the best performing big banks this year and I believe are most likely of the four to surprise to the upside.
CBA has been under a cloud since news broke that Australia's financial intelligence and regulatory agency, AUSTRAC, initiated civil penalty procedures against the bank for alleged breaches of the Anti-Money Laundering Act.
The CBA share price has recovered somewhat over the last month, up more than 3% and a positive trading update on 8 November could be a catalyst for further upward momentum.
The other member of the Big 4, Australia and New Zealand Banking Group (ASX: ANZ), last week reported a full year result slightly below market expectations, though the bank is only mid-way through a multi-year transformation strategy to increase asset efficiency.
NAB recently underwent a similar-type initiative to focus on its core businesses; in the process demerging UK bank CYBG PLC CDI 1:1 (ASX: CYB) and shedding its life insurance business, a move that appears to have improved both performance and financial position.
Should NAB, Westpac and CBA all provide positive announcements over the next week, I expect the ANZ share price to also be pulled higher by its major competitors and the ASX 200 to push past 6000.
Another key factor that could contribute to the upward momentum of the ASX 200 is that final FY2017 dividends are yet to be paid by ANZ, NAB and Westpac. Share prices usually run higher leading up to the ex-dividend date, which starts with NAB on 9 November and followed by ANZ and Westpac on 13 November.
Even if the 6,000 barrier isn't broken before then, there's another potential opportunity when those billions of dollars in bank dividends are paid in December and the annual "Santa Rally" kicks off.
Foolish takeaway
While it can be interesting to keep an eye on the ASX 200 and perhaps use it as an indicator of overall investor sentiment, the performance of broad indexes shouldn't really matter to investors of individual companies (unless of course you own index-based securities!).
It is far more important that investors keep up to date with the long-term stories of companies they own and assess their performance relative to share price.
