Economy and Indices – February 2020

The ASX gained +1.8% over the month of January.

Strong gains were held until the Coronavirus concerns took to the bourses. The weight of the miners dragged the market down from the +4% gains leading into the Australia Day long weekend.

China’s copper and iron ore consumption was running at healthy levels, however, with the Chinese New Year celebration closing the markets, the end of month numbers did not report the impacts of the Coronavirus.

The impacts on the raw commodity markets were reflected in the share prices of Australian Iron Ore Miners BHP, Rio Tinto and Fortescue Metals (FMG) which were all down. Each of the iron miners gave up their gains from the middle of the month. For example FMG were down almost 20% from their mid-month high.

Leading Sectors This month

Information Technology and Health Care + 8%.

Consumer Staples takes a distant third place at +4% for January

Lagging Sectors this month

Energy -6.1%

Utilities -2.3%

Metals and Mining -1.8%

Health Care Insight

CSL: At 52.7% of the Health Care Index (XHJ), CSL has contributed most of the heavy lifting up +60% for the last 12 months.

Resmed (RMD): makes up 13% of the index and is up +83.6%

Sonic Health (SHL): is 6.7% of the index and has gained +35.9%

Cochlear (COH): is 5.4% of the index and has added +22.1% over the same period

Ramsay Health Care (RHC): makes up 3.8% of the index and is up +38%

All of these companies have turned upwards in the last month, around the same time the AUD/USD turned back down again – see the dark purple line below.