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Note from the MD: Market on its best winning streak in six weeks

June 29, 2022

Note from the MD: Market on its best winning streak in six weeks

Tomorrow marks the end of the financial year and what a rollercoaster of highs and lows it has been for investors in 2022 so far.

Tomorrow marks the end of the financial year and what a rollercoaster of highs and lows it has been for investors in 2022 so far.

The ASX 200 is currently on its best winning streak in six weeks, posting its fourth consecutive day of gains and closing slightly higher yesterday, firming up 0.86% to 6763.6.

But it’s a long way from where the index opened on the first day of FY22 (at 7313) and even further from its all-time high just one month later (7632.8) in August 2021.

The market pullback has, without question, affected the equity markets. But as we kick off the new tax year, this represents a rare opportunity to take advantage of these capital-scarce conditions by buying into high-quality, well-led and near-profitable companies at lower valuations.

Following the lead of the XJO itself, just over half of the sectors tracked by the index ended trading higher yesterday, with energy proving the best performer, gaining 3.62%, followed by utilities (3.16%) and materials (3%).

The Aussie market continued its rebound early in the week, reaching a weekly high at yesterday’s close. The market has pulled back from resistance around the 6750 level on today’s open as it follows the US lead lower overnight.

The current resistance level around 6750 is a key level and has recently acted as a pivot point, suggesting the recent wide trading band may persist into the coming weeks. Current support is around 6600.

Implied volatility has eased from recent highs of 25% early last week to around 18.5% today, and the XVI is sitting around 18%. 

We have had a strong interest in the agricultural sector for quite a while now, and it seems the ASX is on board too. Perhaps reflecting the sector’s topical nature, especially against the current backdrop of geopolitical upheaval, the exchange has recently set a new benchmark for monitoring the performance of ASX-listed primary production companies.

Since its launch, the S&P/ASX Agribusiness Index (ASX: XAG) has been calculated on an end-of-day basis only – but it’s worth noting that this changes on Friday, 1st July, to provide investors with quotations in real time.

For those keen to track its progress, it’ll be a Happy New Financial Year indeed.

We have an upcoming webinar with a company that is positioning itself to be a leader in Australia’s $10.7 billion health and wellness market. Wellnex Life Limited (ASX: WNX) is a brand and marketing company that established revenue growth in FY22 and high-profile partnerships with leading retailers as well as global pharmaceutical giant GlaxoSmithKline. Tomorrow at 1pm (AEST), we will be joined by Wellnex Life CEO George Karafotias for a webcast that we think will be a fascinating conversation for potential investors. Click here to attend.

Reach Corporate provides Corporate Advisory Services, including managing investor communications on behalf of Wellnex Life Limited and will receive fees for its services.

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