Motley Fool Australia

ASX 200 Weekly Wrap: ASX retreats as confidence wanes

ASX 200 weekly wrap represented by wooden block letters spelling out 'recap
Image source: Getty Images

The S&P/ASX 200 Index (ASX: XJO) retreated 0.65% last week as global fears over a second wave of the coronavirus pandemic set in.

ASX 200 shares had been enthusiastically rallying in recent months, partly a result of jubilation over the relaxing of COVID-19 restrictions and hopes of a rapid ‘return to normal’ for the economy. But a new surge in cases last week in Victoria, as well as a spike in infection rates across the United States and the United Kingdom, have resulted in old fears boiling to the surface. Last week marked the ASX 200’s second week of losses out of the past 9 weeks of trading.

ASX travel shares lashed the market

It shaped up to be a rather dramatic five days on the ASX boards last week. We finally learned the future of Virgin Australia, with US-based private equity firm Bain Capital emerging triumphant from the administration process as the airline’s new master. Aussie investors might not be too familiar with Bain, but it was notably founded by former US presidential candidate Mitt Romney back in 1984.

In other news, Qantas Airways Limited (ASX: QAN) finally bowed to the inevitable and launched a capital raising program – its first since the coronavirus pandemic began. Qantas shares were placed in a trading halt on Thursday when the announcement was made. Friday saw a return to trading when the company announced that $1.36 billion had been raised from institutional shareholders at a cost of $3.65 per share. Existing retail shareholders also have the opportunity to participate in the program. Qantas shares plunged 9.5% during Friday’s trade to end the week at $3.81.

It was perhaps fortuitous timing for Qantas. ASX travel shares were amongst the hardest hit last week over coronavirus concerns. Webjet Limited (ASX: WEB) shares were down more than 15% over the week. Corporate Travel Management Ltd (ASX: CTD) didn’t fare any better, with its shares down nearly 19% for the week.

Meanwhile, ASX blue chips were the shares holding the fort. CSL Limited (ASX: CSL) shares were up 1.6% for the week, with 2 of the big four ASX banks, Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL) also posting weekly gains.

How did the markets end the week?

It was a week of volatility on the ASX 200 last week, with frequent, large swings in intra-day trading occurring. Monday and Tuesday saw this volatility in play but only recorded 0.03% and 0.2% gains respectively. Wednesday backed up Tuesday with another 0.2% gain, but then Thursday brought a nasty 2.5% loss. Friday saw this loss reverse somewhat with a 1.49% gain. But it wasn’t enough to offset the rest of the week. In the end, the ASX 200 started last week at 5,942.6 points and concluded at 5,904.1 points – putting the week’s loss at 0.65%.

Meanwhile, the All Ordinaries (INDEXASX: XAO) had a slightly worse time last week, starting at 6,061.6 points and finishing up at 6,011.8 points for a 0.82% loss.

Which ASX 200 shares were the biggest winners and losers?

It’s that time of the report where we put the kettle on and have a gossip over last week’s best and worst performers. As always, we’ll start with the losers:

Worst ASX 200 losers

 % loss for the week

Mesoblast Limited (ASX: MSB)

(19.81%)

Corporate Travel Management Ltd (ASX: CTD)

(18.85%)

oOh!Media Ltd (ASX: OML)

(15.32%)

Perenti Global Ltd (ASX: PRN)

(14.25%)

It was a dramatic week on the wrong side of the ASX last week, with some big double-digit losses. Mesoblast took out the wooden spoon though. This ASX biotech company’s shares took a dive, despite no major news out of the company. It’s possible investors were just taking some profits off the table after Mesoblast’s incredible run over the past 3 months. As at 19 June, the company’s shares were up more than 270% since 23 March.

We’ve already discussed the woes of ASX travel shares like Corporate Travel Management, whilst Ooh!Media shares have been under selling pressure ever since the company gave investors a less than uplifting trading update earlier in the month. The outdoor advertising business has been struggling since the onset of the pandemic which resulted in deep cuts to advertising expenditure across the economy.

Let’s now take a look at the winners from last week:

Best ASX 200 gainers

 % gain for the week

Western Areas Ltd (ASX: WSA)

21.97%

Saracen Mineral Holdings Limited (ASX: SAR)

13.56%

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

10.23%

Sandfire Resources Ltd (ASX: SFR)

9.83%

Last week’s winners’ list was dominated by ASX resources shares. The gold medal went to Western Areas, a nickel miner based in South Australia. The company released some positive results from its Western Gawler project, which seems to have been the catalyst for these strong gains.

ASX gold miner Saracen came in at second place. Gold prices have been on the rise in recent weeks (reaching 8-year highs), which has resulted in higher valuations for most gold miners. Sandfire Resources, which produces gold as well as copper, was likely experiencing buying pressure for similar reasons.

What is this week looking like for the ASX 200?

In my view, it’s likely to be (yet another) week dictated by the trajectory of the coronavirus. If signs emerge that the virus looks to be heading towards a ‘second wave’ (particularly in Victoria), then the markets might possibly continue to shed value.

Also worth keeping an eye on is the turbulence over in the US. Like it or not, the US markets play a huge role in dictating the direction of our own ASX. And there has certainly been a lot of tumult across the Pacific. Several US states, including Florida and Texas, are reimposing lockdown restrictions (after initially easing off) in response to a spike in infection rates. This could well lead to pessimism on the US markets as well as our own.

So before we embark on another week, here’s a quick look at how the major ASX blue chip shares are looking:

ASX 200 company

Trailing P/E ratio

Last share price

52-week high

52-week low

CSL Limited (ASX: CSL)

45.87

$292.74

$342.75

$213.25

Commonwealth Bank of Australia (ASX: CBA)

12.57

$69.27

$91.05

$53.44

Westpac Banking Corp (ASX: WBC)

13.50

$17.99

$30.05

$13.47

National Australia Bank Ltd. (ASX: NAB)

16.51

$18.40

$30.00

$13.20

Australia and New Zealand Banking Group Limited (ASX: ANZ)

12.80

$18.80

$28.79

$14.10

Woolworths Group Ltd (ASX: WOW)

18.11

$36.39

$43.96

$32.12

Wesfarmers Ltd (ASX: WES)

22.77

$43.91

$47.42

$29.75

BHP Group Ltd (ASX: BHP) 13.46

$36.05

$42.33

$24.05

Rio Tinto Limited (ASX: RIO)

14.06

$98.99

$107.94

$72.77

Coles Group Ltd (ASX: COL)

18.89

$16.79

$18.09

$12.99

Telstra Corporation Ltd (ASX: TLS)

18.06

$3.13

$4.01

$2.87

Transurban Group (ASX: TCL)

171.38

$14.49

$16.44

$9.10

Sydney Airport Holdings Pty Ltd (ASX: SYD)

31.19

$5.58

$9.30

$4.37

Newcrest Mining Limited (ASX: NCM)

29.74

$31.14

$38.87

$20.70

Woodside Petroleum Limited (ASX: WPL)

40.00

$21.16

$37.28

$14.93

Macquarie Group Ltd (ASX: MQG)

14.02

$119.19

$152.35

$70.45

And finally, here is the lay of the land for some leading market indicators:

  •     S&P/ASX 200 (XJO) at 5,904.1 points
  •     All Ordinaries (XAO) at 6,011.8 points
  •     Dow Jones Industrial Average at 25,015.55 points after falling 2.8% on Friday night (our time)
  •     Gold (Spot) swapping hands for US$1,774.15 per troy ounce
  •     Iron ore asking US$103.23 per tonne
  •     Crude oil (Brent) trading at US$40.39 per barrel
  •     Crude oil (WTI) going for US$37.90 per barrel
  •     Australian dollar buying 68.53 US cents
  •    10-year Australian Government bonds yielding 0.87% per annum

Foolish takeaway

As investors contemplate the prospects of another virus-induced sell-off, I think it’s worth keeping in mind how far the ASX 200 has rallied over the past 3 months. So no matter what happens this week, next month or even for the rest of the year, just remember that investing in shares is about taking the good times with the bad for long-term returns. It’s unfortunately just part of the deal.

So fellow Fools, stay safe, stay rational and stay Foolish this week as always!

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks 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.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Macquarie Group Limited, Telstra Limited, and Webjet Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended oOh!Media Ltd. 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.

Related Articles...

Latest posts by Sebastian Bowen (see all)