Market Wrap – June 2020
The S&P/ASX 200 Accumulation Index was up 2.61% during June. The best performing sector was Information Technology (+6.0%), which was again largely the result of strong outperformance from Afterpay (APT, +33.6%). Consumer Discretionary (+5.4%) also outperformed as a series of sales updates from retailers showed significant growth upon the removal of COVID-19 restrictions. Underperforming the market were the REITs (-2.7%). The sector suffered from outflows as concerns about valuations linger. The COVID-19 period has accelerated the uptake of digital retail and ‘Work from Home’; negatives for Retail and Office REITs respectively. Industrials (-1.7%) also lagged the broader market in a somewhat anti-cyclical mood, as key stocks including Transurban (TCL, -3.0%) and CIMIC (CIM, -4.3%) moved lower.
International equities were up across the board over the period as markets continue to show faith in the reopening of the global economy. The Chinese CSI 300 (+7.7%) and the Hong Kong Hang Seng (+6.4%) performed best following periods of underperformance in May. The fear of a second wave in Beijing was proved to be short lived, though geopolitical tensions between China and the West continue to heighten. The NASDAQ (+6.0%) vastly outperformed its compatriot S&P 500 (+1.8%) as technology companies yet again led the United States higher. Europe (MSCI Europe +3.5%) and the UK (FTSE +1.5%) have announced border openings between certain, COVID-19 controlled nations in a step towards normalisation. Korea (KOSPI +4.4%) and Japan (Nikkei +1.9%) also participated in the rally, though not matching the performance of the Emerging Markets (MSCI EM +6.2%) who followed China higher.
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Source: Motor Trader E-magazine (July 2020)
14 July 2020