The surprise election result this weekend has gone down well with the market, leading to the S&P/ASX 200 index rising over 1.4% to 6,456.7 points at lunch.
Here’s what has been happening on the market today:
Bank shares charge higher.
The Coalition’s election victory is being seen as a big win for the banking sector, lowering risks associated with credit quality, the mortgage market, and regulatory environment. It also means that fully franked dividends are back in favour with investors, which appears to have led to a scramble for bank shares today. The two best performing big four bank shares are National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) with gains of 7% and 7.5%, respectively.
Medibank and NIB charge higher.
Two other companies that have benefited from the shock election result are Medibank Private Ltd (ASX: MPL) and NIB Holdings Limited (ASX: NHF). The shares of these private health insurers are up over 10% at lunch. They were expected to be casualties of a Labor government due to its plan to limit premium increases.
Incitec Pivot disappoints.
The Incitec Pivot Ltd (ASX: IPL) share price has dropped 3.5% lower after its half year results fell short of expectations. The manufacturer and distributor of industrial explosives, industrial chemicals, and fertilisers posted first half EBIT of $119 million, down from $240 million in the prior corresponding period. A note out of Goldman Sachs reveals that it was expecting EBIT of $134 million in the first half.
Best and worst performers.
The best performer on the benchmark index at lunch is the NIB share price, closely followed by Medibank and the big four banks. After which, the Ramsay Health Care Limited (ASX: RHC) share price has risen 6% thanks to the favourable election result. The worst performer on the ASX 200 on Monday has been the Nearmap Ltd (ASX: NEA) share price with a 5% decline. This may be due to profit taking from some investors after an impressive rally in 2019.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Nearmap Ltd., NIB Holdings Limited, and Ramsay Health Care Limited. 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.
- 2 safe and strong ASX dividend shares to buy during the COVID-19 crisis – August 12, 2020 4:45pm
- Are these ASX small cap shares heading for big things? – August 12, 2020 4:21pm
- Earnings preview: What to expect from the NEXTDC FY 2020 result – August 12, 2020 4:08pm