ASX closes flat – Sell in May?

May 3, 2021 - 2 weeks ago
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The Australian stock market looked for direction to the new week, new month, leaving investors to question whether to “sell in May and go away.”

This adage dictates that from now to October is often a less profitable and more bumpy time for stocks.

It is assessed, investors could convert to cash at the start of May and then buy into a dip later in the fall.

“With stocks at record highs, some investors may be tempted to follow the old adage.”

At the closing bell, the benchmark S&P/ASX 200 index eked out a +3 points gain, or +0.04%, to 7,028.8, while the broad All Ordinaries index slid -3.9 points, or -0.05%, to 7,286.8.

The Financials, Telecommunication and Real Estates sectors offset the other eight negative sectors with Information Technology, Energy and Materials all losing over -1%.

It is assessed the ASX 200 could gather momentum ahead of the Reserve Bank of Australia (RBA) rate decision.

However, the statement will be closely scrutinised to see if the tone holds a hawkish or dovish bias.

At present, it is widely expected that there will be little chance the central bank with change course on its interest rate outlook in light of last week’s inflation figures, which showed price pressures remain extremely subdued.

The Reserve Bank of Australia (RBA) board will hold its monthly board meeting on Tuesday, where it is expected to keep the cash rate and other key measures at a record low 0.1%.

The central bank has repeatedly said it has no intention of lifting interest rates until inflation is sustainably within the 2% to 3% target band.

Meanwhile, this Friday, traders will focus on the jobs report from the U.S., which will provide insights into the state of recovery of the labour market.

The Non-Farm Employment Change forecast is seen for a rise of 975,000, with the previous release at 916,000, while the Unemployment Rate forecast at 5.7%, with the last release at 6.0%.

Materials ended back in negative territory, with BHP Group leading the titans lower after losing -1.4%, to $47.03, while Rio Tinto fell -0.87% to $120.09, and Fortescue Metals Group dropped -0.49%, to $22.48.

Smaller miners also fell, with Nickel Mines falling -2.19%, to $1.115, Lynas Rare Earths advanced +0.73%, to $5.54 and Mineral Resources closed -0.31%, lower to $47.60.

Gold stocks were weaker, with Newcrest Mining falling -0.94% to $26.27, Northern Star Resources tumbled -0.29% to $10.48, and Evolution Mining Ltd dropped -1.08% to $4.58.

The Financial sector was stronger, with Westpac Banking Corp leading the “Fab Four” (banks) after climbing +5%, to $26.23.

Meanwhile, Commonwealth Bank ended up +0.74%, to $89.70, with the National Australia Bank adding +2.14%, to $27.23, Australia and New Zealand Banking Group gained +1.25%, to $29.10 and Macquarie Group slipped -0.19% and settled at $160.19.

Supermarket giants Coles and Woolworths were among the consumer staples stocks to ease lower with Coles falling -0.31%, to $16.27, and its rival Woolworths fell -0.76%, to $39.00.

E-commerce group Kogan ended higher after climbing +2.8% to $11.39, Seek dropped -1.28% to $30.97.

Meanwhile, JB Hi-Fi slid -0.11% lower at $46.23, while Telstra added 2.95% to $3.49, while Wesfarmers lost -0.61%, to $53.78, QBE Insurance added +1.32%, to $9.99, and Aristocrat Leisure rose +0.46%, to $37.34.

Biotechnology giant CSL lost -0.08%, to $270.95, while ResMed fell -4.43%, to $25.01, Fisher & Paykel Healthcare dropped -2.14%, to $32.91, while Cochlear slid -0.43%, to $221.55 and Mesoblast plummeted -4.35%, to $1.87.

In technology, Buy-now-pay-later giant Afterpay fell -3.1%, to $114.00, accounting software provider Xero tumbled -1.14%, to $139.95, Altium lost -3.85%, to $28.59, Megaport tumbled -0.56%, to $14.30, NEXTDC sank -0.17%, to $11.57, EML rose +0.7%, to $5.75 and Zip Co plummeted -3.1%, to $7.81.

As for our oil and gas producers, Woodside Petroleum dropped -1.49% to $22.52, while Oil Search ended down -1.59%, to $3.74, Santos lost -2.29%, to $6.82, Worley finished at a -2.58% loss of $10.58, and Beach Energy ended flat at $1.275.

Travel stocks we weaker with Sydney Airport lost -0.65%, to $6.15, Corporate Travel Management lost -3.19%, to $17.92, Flight Centre added +1.01%, to $16.92 and Webjet fell -0.4% to $4.98.

Meanwhile, our local currency, the Australian dollar, is currently buying US$0.7738 (as of writing).

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