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ASX 200 weekly wrap: bear market rollercoaster continues

We had another wild week on the Australian share markets last week – not that you would know it by the bookends. The S&P/ASX 200 Index (ASX: XJO) started the week at 4,842 points. On Friday, we closed out the week at 4,816 points – making the week’s total losses 26 points, or 0.54%.

It’s a slightly disappointing outcome for those investors who might have thought that the long-awaited ‘bottom’ had finally come on Thursday after 2 rare, consecutive days of gains on the ASX.

But unfortunately, with the Prime Minister announcing yet another round of tighter social restrictions last night, this volatility is unlikely to fade out anytime soon. It comes on top of another announcement last Tuesday night, in which the government effectively banned international travel for all Australians.

How did the markets end the week?

As mentioned above, the ASX 200 was down 0.54% for the week, whilst the ALL ORDINARIES (ASX: XAO) finished up the week (somewhat perplexingly) in the green, with a 0.42% rise. The All Ords tracks 500 companies on the ASX in contrast to the 200 tracked by the ASX 200 – meaning variations like this one are uncommon, but possible.

However, these seemingly insignificant statistics hide what was an incredibly volatile week, marked by huge shifts in sentiment and wild swings in the share market.

We started the week on Monday with a heavy loss of 5.6%. Then 2 consecutive days of green ink saw the ASX 200 gain 12.5% by Thursday afternoon. But Friday saw these early gains erased and the market ended up shedding its mid-week bounce with a 5.3% loss.

Just take a look at this graph of Friday’s ASX 200 moves and see for yourself.

Chart: fool.com.au

On a side note and displaying itself as a rare beacon of stability, the Australian dollar appears to have found some support and has been trading around the 60 US cents mark for most of the week.

Which ASX shares were the biggest winners and losers?

So, as always, let’s take a look at both the best and worst performers on the ASX 200 on Friday. Let’s get the bad news out of the way first with the losers:

Chart: Author’s Own

As you can see, the wooden spoon on Friday went to oOh!Media Ltd (ASX: OML).

Advertising companies like oOh!Media have been hit especially hard as the market prices in a likely massive hit to the short-term prospects of any business reliant on advertising dollars. With the economy going into ‘hibernation’, there is likely to be a significant downturn in advertising spending by Australian businesses as a whole. Sadly, oOh!Media has now lost 80% of its market capitalisation since the start of the year and last week announced a deferral of its final dividend.

Also hit especially hard last week has been retail-focused REITs (real estate investment trusts) like Scentre Group (ASX: SGP) and Charter Hall Retail REIT (ASX: CQR).

Obviously, with shopping centres around the country becoming deserted due to coronavirus restrictions on social gatherings, the short-term prospects for shopping centre-based companies are very bleak at the current time. Not helping Scentre and Charter Hall’s prospects is the discussion of commercial lease suspensions by the government in recent days (leases that would ordinarily be paid to these companies).

Credit Corp Group Ltd (ASX: CCP) also makes the losers list this week – no doubt on the back of the government’s recently announced changes to insolvency procedures to assist financially struggling individuals and businesses. As a debt collector, this doesn’t bode well for Credit Corp’s business model.

With the bad news out of the way, let’s take a gaze at Friday’s winners:

Chart: Author’s Own

The clear winner from last week’s final day was ALS Ltd (ASX: ALQ). This medical testing company’s shares were propelled into green territory after it informed the market that most of its laboratories across South America would be deemed ‘essential services’ and allowed to remain open for the foreseeable future.

Fallen WAAAX angel WiseTech Global Ltd (ASX: WTC) also makes the list. Its shares were up 5.07% on Friday, giving this logistics company a rise of over 30% for the week. Although this would have elicited some considerable relief for WiseTech shareholders, the company remains a long way off its 52-week high of $38.80.

What is this week looking like for the ASX?

The only thing that we can take with any hint of certainty about this week is the likely continuation of volatility on the ASX. On Friday night, the American Dow Jones Industrial Average recorded a 4.06% fall, so things aren’t looking too bright across the Pacific.

Something to look out for is further stimulus announcements from the government, which have the potential to move markets this week. Also worth keeping an eye on is the COVID-19 infection rate, which also might instil some confidence in the markets if the curve shows signs of flattening (fingers crossed!).

In some good news for income investors though, there are a few ASX blue chips scheduled to pay out dividends this week. These include Wesfarmers Ltd (ASX: WES), Commonwealth Bank of Australia (ASX: CBA) and South32 Ltd (ASX: S32).

The cash from these dividends will likely be of some comfort to investors during these times. Additionally, anyone who has elected to have these dividends reinvested will be enjoying some relatively low buying prices.

So before we go, here is the lay of the land for the major ASX 200 blue-chip shares as we start the new week:

Chart: Author’s Own

And finally, here’s how some leading market indicators are looking:

  • S&P/ASX 200 (XJO) at 4,842.4 points
  • ALL ORDINARIES (XAO) at 4,874.2 points
  • Dow Jones Industrial Average at 21,636.78 points
  • Gold is asking US$1,617.50 per troy ounce
  • Brent crude oil is trading at US$24.93 a barrel
  • Australian dollar buying 61.65 US cents

Foolish Takeaway

It remains a wild ride on the Australian share markets, and many of us are probably getting motion sickness from watching the peaks and troughs by now (speaking from experience here).

Keeping the bigger picture in perspective is of vital importance during a time like this – we will get through this and come out the other side! Adopting this mindset to your investing is a great way of keeping positive, in my view.

On that note, I’d like to end on a quote I heard this week: “the trees that grow the tallest are planted when it’s raining.”

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As of 17/3/2020

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers Limited and WiseTech Global. The Motley Fool Australia has recommended oOh!Media Ltd 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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