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What to watch on the ASX this week

What to watch on the ASX this week

Australia’s central bank will decide on the official cash rate tomorrow, while data on the nation’s economic growth for the quarter to June will be released on Wednesday.

Oil prices plummeted last week on concern of rising stockpiles, resulting in an overall weakness in Australia’s share market that saw the benchmark S&P/ASX 200 index slumping 2.6% over five days.

Nine of the 10 sectors in the ASX 200 were in the red, with materials stocks at the bottom (-3.9%), followed by energy companies (-3.5%) and telecommunication services providers (-3.4%).

The information technology sector was the only gainer with a 0.6% increase.

Over a week to September 2:

  • Brent oil slipped 6.2%
  • WTI crude plunged 6.7%
  • Iron ore rose 0.4%
  • Spot gold gained 0.3%
  • Australian dollar strengthened 0.1% against the US dollar

What to watch this week

The Reserve Bank of Australia board will meet tomorrow to decide on the nation’s interest rate setting.

Any change in the official cash rate would be a “complete surprise”, CommSec said. “The statement accompanying the decision could be short, although there is scope for a few words on global central bank policy and the stubbornly high Australian dollar.”

The Australian Bureau of Statistics has scheduled to release the June quarter economic growth estimates on Wednesday.

“At this early stage we are tipping growth of around 0.3% in the quarter and 3.1% growth for the year,” said CommSec.

Overseas, the US non-farm payroll data out last Friday night showed the world’s largest economy created 151,000 jobs in August, below the 180,000 to 200,000 additions estimated by the market.

That reduced the prospects of a sooner hike in US interest rates, and drove Asian share markets higher this morning. US markets are closed for Labour Day on September 5.

CommSec said investors are also watching the two-day G20 Summit started yesterday in Hangzhou, China, for various issues that could impact markets this week.

Stock movers

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

Company/Index

ASX code

Weekly price change

Austal

ASB

+23.5%

Southern Cross Media

SXL

+7.1%

Ramsay Health Care

RHC

+7%

Coca-cola Amatil

CCL

+6.8%

FlexiGroup

FXL

+6.6%

S&P/ASX 200

XJO

-2.6%

Platinum Asset Management

PTM

-10.6%

Saracen Mineral Holdings

SAR

-12.3%

Gateway Lifestyle

GTY

-13.6%

Japara Healthcare

JHC

-14.3%

Estia Health

EHE

-36%

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.