The Match Out: ASX rallies ahead of the election, IT stocks lead the way

James Gerrish

Market Matters

A solid session to end the week for Aussie stocks with the local market rallying over 1% with strong gains in some stocks, particularly in the IT & Materials sectors. Easing policy in China was the main catalyst with banks cutting the five-year loan prime rate, which is used to price mortgages. As we’ve written numerous times recently, when China eases policy, they generally do so on multiple fronts which is clearly supportive of growth, a source of significant concern in recent times.

  • The ASX 200 finished up +81pts/ +1.15% at 7145
  • The IT sector was best on ground (+4.56%) while Materials (+2.20%) & Consumer Disc (+2.03%) were also strong.
  • Energy (-1.63%) and Real-Estate (-0.28%) are the weakest links.
  • US Futures were strong throughout our time zone today, Nasdaq the best of them up +1.12% at our close.
  • Westpac (WBC) still reckons the RBA will hike by 0.4% on 7th June despite this week’s slightly lower-than-expected wage price index.
  • My Deal (MYD) +55.81% has received a takeover bid from WOW at a large premium, the deal prices at $1.05 represented a 63% premium to last close. MYD like all e-commerce stocks have been under intense pressure of late.
  • Retailers bounced back today after being hit yesterday, Wesfarmers (WES) +1.87%, Woolworths (WOW) +0.48%, and JB Hi-Fi (JBH) +2.81%
  • IGO Limited (IGO) +5.14% rallied, after announcing its first and consistent production of battery-grade lithium hydroxide from the Kwinana Lithium Hydroxide Refinery. We added IGO to the Growth Portfolio earlier in the week.
  • For the week, ASX added 1% - it didn’t feel like it, however, a 5% gain in the IT stocks provided the most support.
  • Iron Ore was ~4% higher in Asia today supporting Fortescue (FMG) +3.87%.
  • Gold was up overnight + edged higher in Asia today ~US$1846 at our close.
  • Asian stocks were strong Hong Kong put on +2.21%, Japan +1.37% while China was up +1.31%
  • US Futures are all up.

ASX 200

Sectors of the week

Source: Bloomberg

Stocks of the week

Source: Bloomberg

Broker Moves

  • Arafura Resources Rated New Speculative Buy at Bell Potter
  • AACO Raised to Buy at Bell Potter; PT A$2.15
  • ioneer Rated New Buy at Stifel Canada; PT 80 Australian cents
  • Nufarm Cut to Hold at Morgans Financial Limited; PT A$6.65
  • Technology One Raised to Hold at Jefferies; PT A$11

Major Movers Today

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James Gerrish
Portfolio Manager
Market Matters

James is the Lead Portfolio Manager & primary author at Market Matters, a digital advice & investment platform with over 2500 members that offers real market intel & portfolios open for investment. He is also a Senior Portfolio Manager at Shaw and...

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