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ASX this week: Italian polls and Chinese data in focus

ASX this week: Italian polls and Chinese data in focus

A referendum on constitutional reform in Italy has resulted in the resignation of its prime minister, while China will release data on trade and inflation.

Australia’s S&P/ASX 200 index slumped 1.2% last week to 5,444 at trading close on Friday, dragged down by the material, industrial and consumer staple sectors.

On Friday:

  • Brent oil increased 1% to US$54.46 a barrel, chalking up a weekly gain of 15.3%
  • WTI crude advanced 1.2% to US$51.68 a barrel; up 12.2% for the week
  • Iron ore with 62% content delivered to Qingdao, China, dropped 0.7% to US$77.79 a dry metric tonne; down 2.3% for the week
  • Spot gold rose 0.5% to US$1,177.43 an ounce; down 0.5% for the week
  • Australian dollar traded at 74.57 US cents, strengthening 0.2% over the week; the currency fell to 74.33 US cents at 12:12pm Sydney time today

What to watch this week

The week started with resignations from two prime ministers and an election of a president, which saw the ASX 200 volatility index soaring 7% and shares falling by about 1% in morning trade.

Italian Prime Minister Matteo Renzi resigned after his bid for a constitutional reform failed. Italians voted a clear ‘no’ to the referendum, which was seen as a vote of no confidence in Renzi. The euro tumbled after Renzi accepted his defeat.

In Austria, independent candidate Alexander Van der Bellen defeated Norbert Hofer, an anti-immigration nationalist, to win the country’s presidential election. Austria’s president is largely a political figurehead.

New Zealand Prime Minister John Key announced this morning that he will step down to re-focus his attention on his family, saying that he would not be able to commit to his job if his party wins an election due next year. The party caucus is expected to choose a new leader next Monday.

Meanwhile, China has scheduled to release its monthly data on inflation this Thursday, followed by imports and exports on Friday.

These reports will be “a reflection on the state of the global economy”, CommSec said.

Locally, data to be released this Wednesday might show Australia’s economy expanding by 0.4% in the third quarter ended September, according to CommSec. That would bring full-year economic growth to 2.8% from 3.3%, it added.

“Apart from including the latest economic growth figures, there are insights into income and spending of consumers and businesses,” CommSec said.

The Reserve Bank of Australia (RBA) board will meet for the last time this year to set the country’s monetary policy. Investors expect no change in the cash rate tomorrow.

The next RBA board meeting will take place in February 2017.

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, December 2.

Company/Index

ASX code

Weekly price change

Galaxy Resources

GXY

+18.8%

CSR

CSR

+8.5%

Origin Energy

ORG

+6.9%

James Hardie Industries

JHX

+6.1%

Metcash

MTS

+5.3%

S&P/ASX 200

XJO

-1.2%

Aconex

ACX

-12.7%

NextDC

NXT

-13.2%

Syrah Resources

SYR

-14.6%

Vocus Communications

VOC

-25.7%

Bellamy's Australia

BAL

-43.1%

Past performance is not a reliable indicator of future performance. Source: Bloomberg

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. The inclusion of companies in this article does not constitute a recommendation and it’s vital to remember that the value of shares in any company can fall as well as rise, which means you could lose money by investing in them. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.