There is a range of Australian share market trends that I think will continue across this week. Some have been building for a few weeks while others only started recently.
Real estate trading
Real estate trading will likely continue to be very heavy this week. Australian real estate investment trusts (A-REIT) have been among the heaviest-traded shares on the Australian share market over the past 3 weeks. The trading has benefitted companies like office investor DEXUS Property Group (ASX: DXS). However, it has been a little undecided over retail-exposed REITs.
Of all the major real estate companies, it is Scentre Group (ASX: SCG) and Vicinity Centres (ASX: VCX) that have seen their share prices drop marginally. I think this is likely to continue this week. Despite the HomeBuilder package, I think the reality surrounding the housing market is likely to sink in, possibly impacting GPT Group (ASX: GPT), in particular.
Discretionary retail shares
The release of the ABS Retail Trade survey appeared to catch the market off-guard. The survey announced a rise in retail turnover of 16.3% in May 2020. The largest rise in the survey’s 38-year history. This provided a lift to the Australian share market when the survey was released during Friday’s trading. I believe this lift will continue through this week.
It included larger companies like Wesfarmers Ltd (ASX: WES), Harvey Norman Holdings Limited (ASX: HVN) and JB Hi-Fi Limited (ASX: JBH). However, it is also likely to focus attention on small caps like Lovisa Holdings Ltd (ASX: LOV) and Accent Group Ltd (ASX: AX1).
Construction and building
The government’s infrastructure spending package is going to be a slow-burning trend in the Australian share market over the next few weeks. However, I expect investors to be taking positions during this week. The federal government announced fast-track approval processes for 15 major projects as well as an additional $1.5 billion in infrastructure funding. This is aside from any spending currently underway within each state.
Many engineering companies are likely to benefit from this. Yet I think that Boral Limited (ASX: BLD) is going to benefit no matter what. Boral is the largest supplier of construction materials throughout Australia. It also has an international presence in the US and other countries. As such, it is likely to benefit from stimulus spending in many regions.
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Returns as of 6th October 2020
Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Accent Group 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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