The August reporting season has triggered significant share price volatility on the ASX, with price movements setting new records, according to Hamish Tadgell, portfolio manager at SG Hiscock & Company. Approximately 63 per cent of stocks within the ASX 300 Index have experienced price fluctuations of five per cent or more, while a third have seen movements exceeding 10 per cent. SG Hiscock & Company is an Australian investment management firm. They manage a range of portfolios, including Australian equities, global equities, and property securities.
Tadgell noted that overall results have been mixed this reporting season, with underlying growth slowing down. He pointed to the impact of increasing regulation, tariffs, and inflation, which have collectively elevated the cost of doing business for many companies, resulting in a difficult operating environment. Many companies are finding it harder to maintain margins, with the ability to increase prices constrained by rising cost of living pressures.
The volatility has been more pronounced among larger cap companies, with stocks like James Hardie, AGL, CSL, Sonic Healthcare, Woolworths and Amcor seeing extreme price reactions to their results. Small caps, however, have generally outperformed their larger counterparts, buoyed by better growth prospects and expectations of further interest rate cuts. This trend is particularly evident in discretionary retail, REITs, and resources, especially gold stocks.
Tadgell observed that the market appears to be taking a more binary view on results, with passive, quant, and structured products amplifying price swings and often overlooking nuanced details. He also noted a slight increase in confidence in the domestic economy following the Reserve Bank of Australia’s rate cut in May, although US tariffs continue to affect US-exposed stocks.
