ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears

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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ASX 200 weekly wrap represented by wooden block letters spelling out 'recap

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We have just seen a rather dramatic week on the S&P/ASX 200 Index (ASX: XJO) and the Australian sharemarket. The ASX 200 started off the week in spectacular fashion, finally breaking the pre-COVID all-time high of 7,162 points by smashing through to 7,172 points on Monday. 

As we discussed at the time, it was a case of Australian shares playing catchup. The US markets crossed their old pre-COVID highs in August last year, with a couple of months to spare until Christmas. In fact, today the US S&P 500 Index (SP: .INX) is more than 23% above its old pre-COVID high. Well, it took the ASX 200 another 9 months to reach its high watermark after the US, but here we are.

Investors can largely thank the strength of the ASX banking sector, as well as the big miners like BHP Group Ltd (ASX: BHP) for the surge that finally put the ASX 200 over the top last Monday. Over the past month, investors have pushed ASX bank share prices above their own pre-COVID highs in the wake of strong half-year earnings reports from previous weeks.

In fact, Commonwealth Bank of Australia (ASX: CBA) did one better last week, breaking its own all-time high on Friday to set a new record of $97.38. BHP also set another record share price, this one on Monday to coincide with the ASX’s new record. Galloping iron ore and commodity prices were to thank.

Hero to… Xero for ASX 200?

But as quickly as the new high was made, things took a turn for the worse for ASX shares. Tuesday, Wednesday and Thursday all saw the ASX 200 take backwards steps, which quickly dragged investors’ attention away from Monday’s new highs. The catalyst for this turn in sentiment appeared to be some interesting economic statistics coming out of the American economy.

We learned mid-week that consumer prices in the US economy increased by 0.9% over April (or 4.2% if annualised), the highest pace since 2009. Investors have already spent more than a few days in 2021 so far fretting about future inflation, given the size and scale of the US government’s stimulus response. So these numbers caused some panic, as you might expect.

US markets sold off hard over Tuesday and Wednesday, which of course immediately spilled over into the ASX. That’s despite no comparable inflationary concerns down under.

The brunt of this selloff was borne by the tech sector, both here and in the US. ASX tech shares were smashed over the week, with the S&P/ASX All Technology Index (ASX: XTX) losing more than 5% over the week. But that was nothing compared to what some ASX shares copped.

Afterpay Ltd (ASX: APT) shed 9.5% last week, with an 8.75% loss on Tuesday alone. Xero Limited (ASX: XRO) was down over 15%, although that can also be attributed to a lukewarm reception for its full-year earnings. Appen Ltd (ASX: APX) was another ASX tech loser, dropping more than 10%.

How did the markets end the week?

Despite the new all-time high for the ASX 200, it wasn’t enough to stop the index from shedding 0.94% for the week, starting at 7,080.8 points and finishing up at 7,014.2 points. Monday saw the ASX 200 hit its new all-time high with a gain of 1.3% for the day. But Tuesday, Wednesday and Thursday all saw drops of 1.06%, 0.73% and 0.88% respectively. Friday turned things around slightly with a gain of 0.45%, but it wasn’t enough to stem the bleeding from earlier in the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a disappointing week. The All Ords started out at 7,325.2 points and finished up at 7,239.4 points for a loss of 1.17%.

Which ASX 200 shares were the biggest winners and losers?

Worst ASX 200 losers % loss for the week
Perenti Global Ltd (ASX: PRN) (28.6%)
A2 Milk Company Ltd (ASX: A2M) (21.2%)
Xero Limited (ASX: XRO) (15.9%)
Pointsbet Holdings Ltd (ASX: PBH) (13%)

Mining services company Perenti Global was the ASX 200’s wooden spoon recipient last week. Investors were pulling the pin on Perenti after the company downgraded both its revenue and earnings guidance for the current financial year… as well as FY2022. Perenti blamed COVID-19, difficult labour conditions and a rising Aussie dollar for the weakness. Investors weren’t too forgiving though, and sent Perenti home with only a little more than two-thirds of its value intact.

A2 Milk also had a shocker last week, falling a touch more than 20%. The cause for this drop was yet another earnings downgrade from the company, A2’s fourth in FY2021. The company continues to suffer from the collapse of the daigou trade. It also notified investors of some inventory build-up. It was evidently a case of ‘fool me a fourth time’ for shareholders, who were pretty scathing in their response.

Xero was also feeling the pain last week, as we discussed earlier. And finally,  Pointsbet seemed to just be caught up in investors’ sudden distaste of the tech sector with no other major news.

Now with the losers out of the way, let’s take a look at last week’s winners:

Best ASX 200 gainers % gain for the week
Omni Bridgeway Ltd (ASX: OBL) 11.1%
Crown Resorts Ltd (ASX: CWN) 7.6%
Resolute Mining Limited (ASX: RSG) 7.5%
Whitehaven Coal Ltd (ASX: WHC) 7.45%

The rather oddly named Omni Bridgeway took the crown for the best performing ASX 200 share last week with an 11% bump to its value. This litigation company announced a large settlement of a class action it has been managing, which naturally involves a healthy cut of the spoils for Omni. Investors seemed to approve.

Next up we had Crown Resorts, which is never far from the headlines these days it seems. Investors were renewing their interest in Crown last week after its rival Star Entertainment Group Ltd (ASX: SGR) put a merger proposal between the two companies on the table. This ups the ante in the fight for Crown, which was already considering an offer from Blackstone.

Resolute Mining was another winner last week. Investors have been giving ASX gold shares a second look after some price appreciation and the renewed fears over inflation. Resolute appears to have been the pick of the bunch last week.

Finally, we had Whitehaven Coal, which continues to ride happily in the slipstream of high coal prices at the moment.

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 on yet another week in paradise:

ASX 200 company Trailing P/E ratio Last share price 52-week high 52-week low
CSL Limited (ASX: CSL) 37.31 $277.68 $320.42 $242
Commonwealth Bank of Australia (ASX: CBA) 21.48 $96.58 $97.38 $58.65
Westpac Banking Corp (ASX: WBC) 21.75 $25.41 $26.43 $14.91
Australia and New Zealand Banking Group Ltd (ASX: ANZ) 16.61 $27.42 $29.55 $15.07
National Australia Bank Ltd (ASX: NAB) 20.12 $26.22 $27.84 $15.11
Fortescue Metals Group Limited (ASX: FMG) 8.67 $22.79 $26.40 $11.56
Woolworths Group Ltd (ASX: WOW) 36.22 $40.58 $42.57 $33.82
Wesfarmers Ltd (ASX: WES) 32.69 $54.20 $56.40 $36.76
BHP Group Ltd (ASX: BHP) 28.29 $49.57 $51.82 $30.20
Rio Tinto Limited (ASX: RIO) 16.39 $125.43 $132.94 $81.51
Coles Group Ltd (ASX: COL) 20.79 $16.35 $19.26 $14.95
Telstra Corporation Ltd (ASX: TLS) 23.15 $3.45 $3.58 $2.66
Transurban Group (ASX: TCL) $14 $15.64 $12.36
Sydney Airport Holdings Pty Ltd (ASX: SYD) $5.70 $7.49 $4.99
Newcrest Mining Ltd (ASX: NCM) 18.08 $27.63 $38.15 $23.08
Woodside Petroleum Limited (ASX: WPL) $22.58 $27.60 $16.80
Macquarie Group Ltd (ASX: MQG) 19.2 $158.34 $162.06 $101.55
Afterpay Ltd (ASX: APT) $86.35 $160.05 $39.70

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

  • S&P/ASX 200 Index (XJO) at 7,014.2 points.
  • All Ordinaries Index (XAO) at 7,239.4 points.
  • Dow Jones Industrial Average at 34,382 points after rising 1.06% on Friday night (our time).
  • Bitcoin (CRYPTO: BTC) going for US$49,013 per coin.
  • Gold (spot) swapping hands for US$1,844 per troy ounce.
  • Iron ore asking US$208.50 per tonne.
  • Crude oil (Brent) trading at US$68.71 per barrel.
  • Australian dollar buying 77.76 US cents.
  • 10-year Australian Government bonds yielding 1.73% per annum.

That’s all folks. See you next week!

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Sebastian Bowen owns shares of A2 Milk, Bitcoin, National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Pointsbet Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Appen Ltd, CSL Ltd., and Xero. The Motley Fool Australia owns shares of and has recommended A2 Milk, Macquarie Group Limited, and Telstra Limited. 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 Pointsbet Holdings 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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