Research Monitor - June 2016 Edition Research08 Apr 2016

The Australian Share Market, as measured by the S&P/ASX300 Index, fell by 3.9% on a price basis and 2.6% on an accumulation basis during the March quarter.

 

January was the weakest month, with the accumulation index down 5.45%, as concerns over the pace of growth in China, and the impact of weak oil prices on the creditworthiness of energy companies took their toll on world markets. February was not as bad, with some recovery in prices following a weak start to the month. Share prices ended up 1.7% lower in February, despite being down almost 5% for the month at one stage.


A rebound in Chinese markets and a recovery in commodity prices saw some sharp rebounds in resources stocks from a low point of down 15.4% to the 20th of January, to a high point of being up 10.8% on the 7th of March. Resource stocks ended the quarter up 4.4%.


The best performing sector was Capital Goods thanks to the strong performance of thinly traded Cimic Group (CIM). At the other end of the spectrum were Financial Services stocks with both the Banking Index and the Diversified Financials Index off over 10% for the quarter. The Diversified Financials Index is highly correlated to the market due to the prevalence of funds managers in the index. At its low point, the index was down 25% for the quarter, before recovering slightly to be down 15%.


The banking sector also took a hit during the quarter, being down 16% at one stage, recovering to be only down 5% before selling off again to be down 11.2% for the quarter.

 

Read the full report

 

 

 

 

 

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