Australian shares end January 5.5% lower
Australian stocks rose 1.8% this week amid volatile trading, the second consecutive weekly increase, paring the benchmark stock index’s January loss to 5.5%.
The S&P/ASX 200 index added 89.5 points over the week to finish just above 5000 at 5005.5. On Friday alone, the gauge fluctuated between a decline of 0.6% and a gain of 0.6%.
The ASX 200’s monthly fall of 5.5%, or 290.4 points, was the worst since August 2015, according to data compiled by Bloomberg, as global equities suffered from turmoil in Chinese stock markets.
“The market remains jittery. China remains a driver. Its market is in a bear market, having lost [about] 25% of its value this month alone,” said CommSec market analyst, Steven Daghlian.
“Looking at the different sectors [in the ASX 200], energy, mining and banks are all down between 8% and 10% or so in January and have been by far the worst performers and the biggest drags on trade this month,” he said.
The S&P/ASX 200 VIX index, which measures market volatility, recorded readings of above 20 in all except three trading days in January. A reading of 20 to 30 indicates that investors hold a ‘negative’ short-term view on the markets.
For next week, investors will pay attention to the Reserve Bank of Australia’s decision on interest rates on Tuesday, and the central bank’s statement on monetary policy on Friday.
Key economic data scheduled for next week includes Australia’s retail trade, building approvals and international trade for December. Internationally, China will release its manufacturing data on 1 February, while the US non-farm payroll report will be out next Friday US time.
Sector performance this week
All sectors within the ASX 200 except healthcare advanced this week, led by energy and financial companies that were hugely sold down earlier this month.
The S&P/ASX 200 Energy Index increased 7.4%, after both the Brent and WTI crude oil futures extended their gains from last week.
AWE (ASX: AWE) soared 56%, the best-performing energy stock, followed by Santos (ASX: STO) and Woodside Petroleum (ASX: WPL), which climbed 11.3% and 9.8%, respectively.
Meanwhile, the S&P/ASX 200 Financials Index added 2.4% over five days. Shares in Westpac (ASX: WBC) rose 3.1%, while ANZ (ASX: ANZ) was 3.6% firmer.
JB Hi-Fi best stock in January
Consumer electronics retailer JB Hi-Fi (ASX: JBH) had the steepest increase among ASX 200 stocks this month, having surged 20% from the end of 2015. The stock has benefited from the collapse of rival Dick Smith Holdings, which went into receivership.
Whitehaven Coal sat at the bottom of the ASX 200 monthly performance ladder after sinking 41.4%.