Research Monitor - March Quarter 2018 Research22 Jan 2018

The Australian Share Market, as measured by the S&P/ASX 300 Index, rose by 6.9% on a price basis and by 7.7% on an accumulation basis during the December quarter, ending a pattern of low returns.


Looking beneath the index level, however, there was much movement with the best performing sector – Household and Personal Products – outperforming the worst performing sector – Banks - by 28.6%. 

Although Household and Personal Products was the best performing sector, it only contains three stocks – Blackmores (BKL) (up 43.4%), BWX (BWX) (up 31.6%) and Asaleo Care (AHY) (down 2.9%) – and only makes up 0.21% of the index. Amongst the larger sectors, it was the case of Energy (up 18.3%) and Materials (up 13.0%) against the Banks (up only 1.9%). Energy/Materials make up 23% of the Index and Banks make up 26% so this was the key to performance in the quarter.

A number of sectors rebounded after a lacklustre September quarter and some of the standout sectors and stocks included Healthcare Equipment and Services (up 11.5%) thanks to strong performances from Resmed (RMD) and Cochlear (COH) each up 12+%. The Food and Beverage sector was also up strongly (15.5%) thanks to a2 Milk Company (A2M) up 25.8% and Treasury Wine Estates (TWE) up 16.6%. The big underperformer – Banks – saw three of the big four post share price falls for the quarter with ANZ down 2.9% (ex $0.78 dividend), NAB down 6.1% (ex $0.99 dividend during the quarter) and WBC down 1.8% (ex $0.94). Of the big four, only CBA (up 6.8%) rose.

Global markets performed well in the December quarter, and the Australian dollar was essentially flat over the period. NASDAQ index was up 6.3% as technology stocks continued their recent strong gains, the broader S&P500 was up 6.1%, European stocks fell 0.9%, Japanese stocks rose 8.4% and the World index was up 5.0%. Fixed income markets were slightly better as some bond yields drifted lower, with the Bloomberg AusBond Composite (0+Y) Index up 1.4%.


Read the full report

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