Paula Lyons, IG’s dealing floor
As the year draws to a close, let’s take a look back at how the Australian market and the sub-sectors have performed. Firstly, 2013 looks like being the strongest year since 2009, with the ASX 200 up over 9.8% year-to-date; however at its peak in October the index was up 17.4% (with a high of 5457).
Moving to the sectors, the worst performing sector was clearly the materials space and although the overall industrial sector is higher, certain names in the mining-services space like BLY or FGE have been smashed.
The finance sector is up a healthy 18.57% year-to-date. This is clearly down to solid performances from the big four banks, with CBA up 19.8%, WBC higher by 19.3%, ANZ up 22.1% and NAB firmer by 31.5%. Clearly the chase for income and yield has been the major theme here.
The materials sector has been the biggest drag on the ASX, falling 8.52% year-to-date. The main reason for this comes from the gold space, with the biggest mover being NCM, down over 70% since January, with traders shunning the precious metal. The iron ore providers have had a mixed year, as the China story and cost-cutting continue to impact sentiment. BHP is down 2.48% on the year, while RIO is lower by 0.4%, however FMG is seeing better days, up 20.4%.
The energy sector has seen a strong upsurge, with the sector up 5.37% year-to-date. When you see natural gas putting on 7.2% and WTI (West Tex Intermediary) 7.5%, you can see why investors and traders have been happy to buy stocks in this sector.
Consumer discretionaries have seen the biggest increase out of all the sectors, up 29.11% year-to-date. Clearly the fifty basis points of cuts this year to the official cash rate (from the RBA) have helped sentiment towards the space. MYR is up 17.6%, DJS is higher by 15.7%, while JBH is up a massive 89.1% (all year to date). These are big gains despite many continuing to see ‘challenging conditions’.
The staples sector has seen a 7.34% increase. The main players contributing to this have been WOW which is up 11%, with WES just in front, firmer by 11.6%.
The health-care sector sources a large percentage of its revenue from overseas, and the falls in the AUD on a trade-weighted basis have been a huge benefit. This sector year-to-date has risen by 18% and could be one to watch for 2014, especially if we see AUD/USD move into the 0.8500 to 0.9000 range.
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