ASX 200 Weekly Wrap: Bank shares push ASX 200 higher

The S&P/ASX 200 Index (ASX: XJO) shook off the malaise that has recently dominated market sentiment and delivered a 1.71% gain last week. It was the best week the ASX 200 has had in a month and a half and pulled the ASX 200 back towards the 6,000 point mark that it deserted earlier this month.

ASX bank shares go bananas

It was another topsy turvy week for the ASX 200, which saw the index down by 1.4% by the end of trading on Tuesday. But then a series of strong market rallies turned things around, including a massive day on Friday, which saw ASX 200 shares gain 1.5% on that day alone. This session was dominated by the big four ASX banks, most of which saw share price rallies of more than 6% on Friday. The Commonwealth Bank of Australia (ASX: CBA) share price was the outlier with a more muted 3% gain.

The catalyst for this major share price push was the decision by the government to weaken financial consumer protection laws, which (if proceeded with) will take the banks off the hook if any would-be borrowers give the banks false information relating to loan applications. Evidently, investors saw this as a major boon for the banks' profits which led to this significant re-rating of bank shares. As the big four are all major top ten constituents of the ASX 200, this move in the banks' share prices was largely behind the overall index's positive performance last week.

It was an especially remarkable performance from Westpac Banking Corp (ASX: WBC) shares. Thursday saw an announcement that Westpac would have to foot a record $1.3 billion fine from AUSTRAC (the largest corporate fine in Australian history), which subsequently pushed Westpac shares to their lowest level in four months. But this was all forgotten on Friday when the Westpac share price rallied 7.4%.

In other news, ASX tech shares also had a positive (albeit patchy) week after some recent volatility. The S&P/ASX All Technology Index (ASX: XTX) was up 0.9% for the week, with sharp moves at market open on both Wednesday and Thursday — one up, one down. This was purely reflecting what was happening in US markets overnight, which seem to be the main source of direction for ASX tech shares these days.

How did the markets end the week?

Although the ASX 200 Index had a strong week, starting at 5,864.5 points and finishing up at 5,964.9 points for a week-to-week gain of 1.71%, it wasn't a smooth line up over the week. Monday started the week off on a sour note with a 0.7% fall for the ASX 200. Then Tuesday doubled down with another 0.7% drop. Wednesday really turned things around with a 2.4% gain, which was blunted somewhat with a 0.8% drop on Thursday. However, it was Friday's powerful 1.51% gain which sealed the good news for ASX investors for the week.

Over on the All Ordinaries Index (ASX: XAO), investors also had a good week. The All Ords started the week off at 6,057.6 points and finished up at 6,140.5 points for a week-to-week gain of 1.37%. Interestingly, Tuesday saw the All Ords dip below 6,000 points for the first time since late June.

Which ASX 200 shares were the biggest winners and losers?

Time now for some tea and biscuits as we pour over the Foolish gossip pages of last week's biggest winners and losers. As always, we'll start with a look at the losers:

Last week's wooden spoon went to gold miner Ramelius. All ASX gold miners, including Gold Road and St Barbara, were sold off last week as a consequence of the gold price sharply dropping to a two-month low, partly on the back of a stronger US dollar. Needless to say, with three of the four losing spots this week, it wasn't a good week to own gold shares.

Also making the list was embattled real estate investment trust (REIT) Unibail-Rodamco-Westfield. Together with the next loser in line from last week — Virgin Money UK (ASX: VUK) — URW's fall was likely due to the company's connections to the United Kingdom. The UK is currently battling a second wave of coronavirus infections and this obviously doesn't bode well for a shopping centre operator (or a bank). Investors have reacted accordingly.

With the losers out of the way, let's now check out last week's winners:

Last week's winning spot went to industrial conglomerate Soul Patts. Investors were very excited over the company's full-year results which were released to the market on Thursday morning. These results included Soul Patts' 20th consecutive annual dividend increase, a feat unmatched by any other ASX 200 company. No surprise investors chose to award high marks.

Next up we had coal miner Whitehaven, which coincidentally forms a large holding in Soul Patts' portfolio. This increase appears to be the result of some positive broker coverage.

Service Stream was also in investors' good books last week due to the government's announcement of an additional capital allocation to the national broadband network (NBN). Since Service Stream is an almost-direct beneficiary of NBN spending, clearly investors weren't letting this one get away.

What does this week look like for the ASX 200?

It will be very interesting to see if investors abrupt change in sentiment surrounding the big ASX banks holds up when trading resumes today. As I mentioned earlier, the big four are major components of the ASX 200, so these moves will likely set the tone for the market's opening salvo.

In other news, there are a few major ASX blue chip shares that will be paying out dividends this week, which I'm sure will be welcomed by all eligible investors. These include bank shares CommBank and ANZ as well as Coles Group Ltd (ASX: COL) and Fortescue Metals Group Limited (ASX: FMG).

In other news, we also have the first US Presidential debate on Tuesday (US time) between President Donald Trump, and challenger and former Vice President Joe Biden. The US elections are just around the corner and are highly anticipated by investors — so we might see a market move if one of the candidates lands a rhetorical knock-out punch. And, as ever these days, I'll be keeping a firm eye on the US markets in general for a heads up on our own ASX.

Before you go, here's a look at how the major ASX 200 blue chips are looking as we start another week on the markets: