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ASX this week: Chinese markets and falling pound

ASX this week: Chinese markets and falling pound

Chinese financial markets re-open today after the Golden Week holiday, with the yuan currency in focus after it was added to the International Monetary Fund's basket of reserve currencies last week.

Australian shares rose last week to post their third consecutive weekly increase, with the S&P/ASX 200 index adding 0.6% over five days to 5,467.4 on Friday, October 7.

On Friday:

  • Brent oil slid 1.1% to US$51.93 a barrel, reducing its weekly gain to 5.8%
  • WTI crude fell 1.2% to US$49.81 a barrel; up 3.3% for the week
  • Iron ore with 62% content delivered to Qingdao, China, was unchanged at US$55.86 a dry metric tonne due to a week-long public holiday in China
  • Spot gold traded at US$1,257.08 an ounce, plunging 4.5% for the week, its steepest weekly decline since November 6, 2015
  • Australian dollar was trading at 75.82 US cents and was up 0.2% to 75.94 US cents at 11:10am Sydney time on Monday

What to watch this week

Financial markets in China resume trading today after the Golden Week National Holiday.

Investors are likely to focus on the movement of the Chinese yuan after the currency officially became one of the International Monetary Fund's reserve currencies last week, according to CommSec.

The other currency to watch is the pound, which plunged last week, "with traders blaming concerns over Brexit and a flash crash that hit the market", CommSec said.

On the economy front, a key report to be released this Friday is the semi-annual Financial Stability Review by the Reserve Bank of Australia.

"Expect plenty of comments on the conditions in the new housing market and the potential risks that lie ahead," CommSec said.

Meanwhile in the US, a second presidential debate is taking place at 9pm Eastern Time on Sunday (12 noon Sydney time on Monday).

Stock movers

Below are the best- and worst-performing ASX 200 stocks for the week ended Friday, October 7.

Company/Index

ASX code

Weekly price change

Australian Agricultural Co

AAC

+15.3%

Whitehaven Coal

WHC

+11.8%

Henderson Group

HGG

+9.2%

Beach Energy

BPT

+9.2%

Santos

STO

+8%

S&P/ASX 200

XJO

+0.6%

St Barbara

SBM

-14.7%

Saracen Mineral Holdings

SAR

-16.3%

Resolute Mining

RSG

-17%

Northern Star Resources

NST

-17.2%

Syrah Resources

SYR

-20.1%

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.