ASX 200 cruises past $6,000 as NAB and Westpac share price fly
The ASX 200 made a major milestone today. The index moved above the important psychological level of $6,000 as investors reacted to the positive emergence of the economy. By gaining about 40 basis points, the index outperformed its New Zealand counterpart. Shares in the big four banks rose sharply after UBS issues an upgrade on two.
UBS upgrades NAB and Westpac
In a statement earlier today, analysts at UBS upgraded Westpac Banking Corporation and its peer, the National Bank of Australia. The bank lifted their share forecast to $20.50. In a statement, the analysts said that the Australian economy had made some progress and that the outlook for the economy had improved.
The bank also cited the recent RBA interest rate decision, in which the bank said that it had started to taper its asset purchases. This sent a signal that it will not implement negative interest rates as its New Zealand counterpart has suggested.
Also, UBS expects the bank’s dividend yield to remain quiet healthy. The analysts said that they expect the yield to be in the zone of about 7.2%.
By upgrading the stocks, UBS now has a buy rating on the big four banks, including ANZ and CBA.
Housing crisis to remain
The ASX 200 rose even as a report by CoreLogic said that the sector will continue struggling even as the government implements a stimulus package. In the stimulus, the government has been giving handouts to people to help them build or renovate the homes.
The report shows that house prices will continue falling, especially in Sydney and Melbourne. They expect the decline to be in the region of 10%. In a statement, a Mr Lawless said:
“Our house view is unchanged, although it’s fair to say a 10 per cent drop is looking pessimistic at the moment.”
The report came after UBS upgraded the sector. The bank said that it expects the housing sector to decline by between 5% and 10%. In April, the bank was expecting a decline of 10% and above.
At the peak of the crisis, some analysts, especially those at SQM Research were predicting a 30% decline in house prices.
S&P/ASX 200 best and worst performers
The best performers in the ASX 200 were Pilbara Minerals, Bank of Queensland, NRW Holdings, Sydney Airport, and Nine Entertainment. These shares rose by more than 5%. Shares of Westpac, NAB, CBA, and ANZ rose by 3.63%, 3.30%, 1.66%, and 3.23% respectively.
On the other hand, the worst performers were Pro Medicus, Nanosonics, Appen, and Altium. Appen shares declined after the founder started offloading shares.
The ASX 200 rose today and ended the day at about $6,000. On the daily chart, this price is slightly above the 50-day and 100-day exponential moving averages. It is also above the important support of $5920. Therefore, the upward trend will likely continue soaring as investors attempt to test the 61.8% retracement at $6138.
On the other hand, a move below $5,800 will invalidate this trend. This price is along the 50% retracement level.