ASX 200 Weekly Wrap: ASX cools on earnings reality check

Here on our ASX 200 Foolish Weekly Wrap, we look at the things that moved the S&P/ASX 200 Index and the broader share market last week!

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Last Monday, we discussed how the S&P/ASX 200 Index (ASX: XJO) had just had its best week in months, as the Reserve Bank of Australia (RBA) unleashed a new wave of record stimulus.

Today, the picture is far more subdued as the cold reality of earnings reports and a new wave of coronavirus-induced lockdowns dragged bullish investors back to earth. This resulted in the ASX 200 going backwards last week, sliding 0.5% to finish the week at 6,806.7 points.

Cyclical shares, particularly those in the travel sector, were among the worst hit last week, particularly on Friday. That’s when the Victorian Government announced that the state would be entering a snap 5-day lockdown in response to a fresh COVID-19 outbreak.

As a result, the Qantas Airways Limited (ASX: QAN) share price fell 4.81% on Friday, while Webjet Limited (ASX: WEB) fell 3.93% and Corporate Travel Management Ltd (ASX: CTD) fell 2.5%.

Miners also had a bad day on Friday. BHP Group Ltd (ASX: BHP) was down 1.67%, while Rio Tinto Limited (ASX: RIO) fell 1.15%.

A mixed earnings bag

The banks also had a pretty uninspiring week in contrast to the prior week’s euphoria. Commonwealth Bank of Australia (ASX: CBA) was down 2% over the week after investors were left rather unimpressed following the bank’s half-year earnings report. The other ASX banks more or less went in the same direction.

However, there were some shares that did manage to impress investors. Telstra Corporation Ltd (ASX: TLS) was one. Investors liked that the telco giant once again reaffirmed a 16 cents per share annual dividend. That was evidenced by the fact the Telstra share price rose to a new 6-month high of $3.30 during intraday trade on Friday.

ASX gold miner Newcrest Mining Ltd (ASX: NCM) was another. The Newcrest share price was up 4.38% for the week after investors were impressed by how the miner manged to capitalise on higher gold prices to deliver a 21% rise in revenues.

Buy now, pay later (BNPL) shares were also standout performers last week. Most prominent was Zip Co Ltd (ASX: Z1P), which saw a new all-time high of $11.06 reached on Friday after rocketing 24.8% over the week. A strong quarterly update, recent goodwill in the sector, and speculation the company might list on a US stock exchange were all probable factors here. 

Zip’s arch-rival Afterpay Ltd (ASX: APT) had a strong start to the week when it hit a new all-time high of its own of $159.00 on Tuesday morning. However, the momentum faded soon after, and the BNPL pioneer finished up slightly in the red for the week by Friday afternoon.

How did the markets end the week?

The ASX 200 started off the week at 6,840.5 points and finished up at 6,806.7 points, translating into a 0.49% fall for the week.

Monday started the week off on the right side of the bed with a 0.59% gain. The losses started coming by Tuesday though when the index shed 0.86%. Wednesday saw this slightly reversed with a 0.52% rise. But it was all downhill from there. Thursday saw the markets shed 0.1%, which was doubled down on Friday with another 0.63% shaved off.

Meanwhile, the All Ordinaries Index (ASX: XAO) also finished up in the red (although still above 7,000 points), starting at 7,112.9 points, and finishing up at 7,081.3 points for a 0.44% slide.

Which ASX 200 shares were the biggest winners and losers?

Time for our winners and losers section, where we do our best to put the S in salacious and gossip over last week’s biggest winners and losers. So get the pot brewing as we start with the losers:

Worst ASX 200 losers % loss for the week
Cimic Group Ltd (ASX: CIM) (20.7%)
AMP Ltd (ASX: AMP) (16.2%)
Challenger Ltd (ASX: CGF) (12.9%)
Bravura Solutions Ltd (ASX: BVS) (11.9%)

Last week’s ASX 200 wooden spoon went to engineering contractor Cimic. This company released its earnings report on Wednesday and was evidently dumped by investors as a result. No one was too impressed with Cimic’s underlying profits of $601 million (down from $800 million in FY2019) and the company was handed a 20% reduction in market capitalisation as a result.

Next up was ASX dog AMP. AMP also reported last week and gave the company’s world-weary investors a 33% slide in net profits. The AMP share price finished up on Friday at a lowly $1.32. That’s a depressing departure from the $13.30 share price the company was commanding in 1999, more than 20 years ago. 

Challenger was also caught up in a disappointing earnings report. The company reported that net profits slumped by 10%. Not what investors were wanting to hear. 

And Bravura was down for no obvious reason.

Now with the losers out of the way, let’s have a glimpse at the ASX 200 shares making investors happy last week:

Best ASX 200 gainers % gain for the week
Zip Co Ltd (ASX: Z1P) 24.8%
Vocus Group Ltd (ASX: VOC)
Graincorp Ltd (ASX: GNC) 12.5%
Insurance Australia Group Ltd (ASX: IAG) 7.9%

We’ve already discussed Zip Co, but it does say a lot that this BNPL share topped the entire ASX 200.

Telco Vocus was in the news after the company confirmed it is being looked at as a takeover target by Macquarie Infrastructure and Real Assets. 

Agricultural giant Graincorp was also a winner last week. The company was in the good books after a trading update that advised it’s looking at a bumper harvest, which the company is expecting to produce a profit double over last year’s haul. 

Finally, insurance giant IAG delivered a strong earnings result, which delighted investors. The company reported that insurance profits were up 33.1% and declared a 7 cents per share dividend. 

A wrap of the ASX 200 blue-chip shares

Before we go, here is a look at the major ASX 200 blue-chip shares as we start another week in ASX paradise. Note that the price-to-earnings (P/E) ratios of some of these companies are starting to move around as the companies update their earnings:

ASX 200 company Trailing P/E ratio Last share price 52-week high 52-week low
CSL Limited (ASX: CSL) 46.41 $276.76 $342.75 $242.67
Commonwealth Bank of Australia(ASX: CBA) 19.32 $86.87 $91.05 $53.44
Westpac Banking Corp (ASX: WBC) 34.75 $22.14 $25.96 $13.47
National Australia Bank Ltd (ASX: NAB) 22.97 $24.93 $27.49 $13.20
Australia and New Zealand Banking Group Ltd (ASX: ANZ) 20.50 $24.82 $27.29 $14.10
Fortescue Metals Group Limited (ASX: FMG) 12.03 $23.83 $26.40 $8.20
Woolworths Group Ltd (ASX: WOW) 44.64 $41.10 $43.96 $32.12
Wesfarmers Ltd (ASX: WES) 38.38 $55 $56.40 $29.75
BHP Group Ltd (ASX: BHP) 22.05 $44.72 $47.54 $24.05
Rio Tinto Limited (ASX: RIO) 20.61 $117.35 $127 $72.77
Coles Group Ltd (ASX: COL) 24.76 $18.15 $19.26 $14.01
Telstra Corporation Ltd (ASX: TLS) 21.25 $3.25 $3.94 $2.66
Transurban Group (ASX: TCL) $13.05 $16.44 $9.10
Sydney Airport Holdings Pty Ltd (ASX: SYD) 84.99 $5.59 $8.40 $4.26
Newcrest Mining Ltd (ASX: NCM) 24.17 $25.96 $38.15 $20.70
Woodside Petroleum Limited (ASX: WPL) $24.98 $34.34 $14.93
Macquarie Group Ltd (ASX: MQG) 21.8 $144.28 $152.35 $70.45
Afterpay Ltd (ASX: APT) $151.74 $159.50 $8.01

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

  • S&P/ASX 200 Index (XJO) at 6,806.7 points.
  • All Ordinaries Index (XAO) at 7,081.3 points.
  • Dow Jones Industrial Average Index (DJX: .DJI) at 31,458.4 points after rising 0.09% on Friday night (our time).
  • Gold (spot) swapping hands for US$1,824.77 per troy ounce.
  • Iron ore asking US$160.82 per tonne.
  • Crude oil (Brent) trading at US$62.43 per barrel.
  • Australian dollar buying 77.56 US cents.
  • 10-year Australian Government bonds yielding 1.22% per annum.

That’s all folks. See you next week!

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Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd, CSL Ltd., and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Challenger Limited, Corporate Travel Management Limited, Macquarie Group Limited, Telstra Limited, and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Bravura Solutions Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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