ASX Underperforms In October

By Glenn Dyer | More Articles by Glenn Dyer

A small loss for October of 0.4% for the ASX 200, thanks to the sell-off on the final two days of the month of over 1.2% or 82 points.

The ASX 200 Index slid 26.1 points, or 0.4% on Thursday after the 0.8% or 55.9 points drop on Wednesday.

But while the market went nowhere, the Aussie dollar ended October with a rush – up over 69 US cents to end around 69.12 US cents for a 2 cent gain overall.

The currency gained from the Fed’s pause move on Wednesday and a realisation that another rate cut in Australia probably won’t happen until early 2020.

The ASX 200 ended the month at 6,663.4, still short of the all-time high hit at the end of July of 6,845.1.

Despite the dip, the index is still up 18% for the year so far, but the index has only risen 54.6 points or less than 1% from the June 28 close of 6,618.8 (which was the final trading day of June and the June quarter).

The local market looks like starting November with a fall of around 28 points according to overnight trading in ASX 200 futures.

Global iron ore prices – the most important commodity for Australia – fell 7% to $US85.97 a tonne on October 31 for 62% Fe fines delivered to northern China, according to the Metal Bulletin’s Fastmarkets index. The closes at September 30 was $US93.38 a tonne.

Wall Street ended October in the red but made gains for the month.

The Dow fell 140 points, or 0.5%, to end at 27,046.23, while the S&P 500 closed 12 points lower, down 0.3% at 3,035.79. The Nasdaq edged lower by 11.6 points, or 0.1%, to around 8,292.36

Major indexes logged monthly gains, with the S&P 500 posting a 2% October rise, the Dow up half a percent and the Nasdaq Composite jumping 3.7%.

European shares did well in October – the Stoxx 600 index fell 0.49% on the last day of the month but still rose more than 5.1% over the month with gains in Germany (over 7%) and France (over 5%) and London (2.4%, despite the distractions of Brexit).

In Asia, the Hong Kong market rose 3% despite the almost nightly protests which helped the region slip into a recession with growth in August and September falling.

The Nikkei jumped more than 7% in Tokyo while the Shanghai market in China rose more than 5% despite the weakest economic growth in the September quarter for 27 years.

Gold and silver ended October with solid gains.

Comex gold for December delivery jumped $US18.10, or 1.2%, to settle at $US1,514.80 an ounce – the highest most-active contract finish since September 26.

Comex December silver also did well on October 31 – up 20 cents, or 1.1%, to end at $US18.067 an ounce. Most-active silver futures haven’t settled above $18 since September 25 according to FactSet data.

Comex December copper fell 1.8% to $US2.638 a pound on October 31 but rose 3.2% for the month.

Oil prices had mixed months – the West Texas Intermediate crude for December contract fell 88 cents, or 1.6%, to settle at $US54.18 a barrel in New York on October 31, but still eked out a tiny gain of 0.2%.

Global benchmark Brent crude – the December contract – eased 38 cents, or 0.6%, to end at $US60.23 a barrel in Europe. The contract, which expired at the day’s settlement, posted a gain of 0.9% for the month. January Brent crude, which became the front month, lost 62 cents, or 1%, at $US59.62 a barrel.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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