ASX gain reveals losers in a volatile market

If a stock cannot gain across a session that was the best in four decades, it is facing serious trouble.

Winners and losers on a record-breaking day. Picture: AAP

Wild swings in share market sentiment might even be accelerating on the ASX as we enter the “nuts and bolts” phase of government stimulus measures.

After the Morrison government announced a $130bn wage support package — which goes directly to employers, not employees — the ASX gained 7 per cent, its best session in 40 years.

Just now though, one-day sharemarket records mean very little as the market becomes a cauldron of speculation over near-term moves which have little to do with the deeper issues facing an economy entering recession.

Predictably, the late lift which brought Monday’s session into the record books was driven by a rush to buy stocks in the last half hour of trade. The rush coincided with signs US futures were again in positive territory.

Putting this “relief rally” into perspective, the ASX 200 index is now at a severely depressed level of 5181 points, compared to 7162 on February 20.

Moreover, more than a hundred companies have now withdrawn earnings guidance.

Indeed the losers in this record-breaking session may be a more useful pointer for serious investors: if a stock cannot gain across a session which was the best in four decades it is facing serious trouble.

One clear negative was the early response by investors to the government’s plan to freeze evictions on the commercial property market, as some of the nation’s best known property groups led the declines. Growthpoint Properties was the worst affected of the major names, dropping 3.5 per cent to $2.44.

The Scentre shopping centre group was also among the losers, dropping 2.3 per cent over the session as shopping centres struggle with a looming rent strike from tenants such as Premier Investments, which dramatically bolted its doors last week standing down 9000 staff. The multinational group which owns Just Jeans, Portmans and Smiggle gained 7.6 per cent to close at $11.18.

Similarly, Sydney Airports did not ride the uplift, dropping another 2 per cent to $5.95. The $13bn stock is down from a recent peak of $9.30.

There were also clear signals of deep stress in the energy sector. The market clearly warmed to the Woodside decision to put all of its three giant projects in Western Australia on ice — it gained 6.7 per cent to $17.97.

But in the same session, its two local rivals, Oil Search and Santos both fell 0.9 per cent.

Nonetheless, the day’s trading did show new support for blue chip companies and major employers which will directly benefit from the government plan to offer $1500 to every employee per fortnight.

The money was most obviously flowing towards healthcare stocks, with Ramsay Health Care up 11.9 per cent and Cochlear gaining 9.8 per cent to $182.81 (Cochlear’s raising is at $140 per share). CSL put on 12 per cent.

The eyebrow raiser of the session was a 25 per cent lift at surgical gear maker Ansell to $29.03

The major banks — which are on dividend yields near 10 per cent — did better than the wider market, with Commonwealth Bank up 10.9 per cent and ANZ up 8.5 per cent and National Australia Bank and Westpac both lifted 7.9 per cent and 8.5 per cent respectively.