The week so far: stocks stay in positive territory, Mesoblast surges

ASX 200: a tale of two halves

Australia 200 shares have slipped from mid-week highs but are still in positive territory overall.

The benchmark ASX 200 index finished Thursday’s session at 5,364.20 points, up 44.4 points, or 0.8% for the week.

So far, the week has been a tale of two halves. On Tuesday, the index closed at 5,407.10 points, up 161.20 points, or 3.1% for the first two sessions of the week. The result was driven predominantly by banks and energy shares, with materials only slightly up and healthcare down.

By Thursday’s close, the roles had changed. The ASX 200 Financials index slipped into negative territory, down 0.5% for the week.

Healthcare on the other hand turned positive, up 0.5%, while energy shares were off their Tuesday highs, but still up 3.3%. Materials also helped out on the mining heavy ASX 200, rising from modest gains on Tuesday to be up 2.8% with one day left in the week.

Healthcare and Energy stocks in focus

As the index started to come off its midweek highs the news turned towards healthcare companies, which are thought of by many as counter-cyclical and useful during an economic downturn.

Blood plasma giant CSL Ltd (CSL) finished Thursday’s session at $307.93, down 1.9% for the week. The company conducted a US$750 million debt raising ‘for general corporate purposes.’

Elsewhere in the sector things were looking positive. Bionic-ear maker Cochlear Ltd (COH) rose 2.9% to $184.50, while Sonic Healthcare Ltd (SHL) jumped 5.6% for the week so far to last trade at $25.86.

But all eyes were on regenerative medicine company Mesoblast (MSB), which surged by 12.5% on Wednesday after news broke that it had started phase 2/3 of a trial treating 300 patients in the US with severe Covid-19 symptoms. The company’s shares are up 9.6% for the week to $3.54.

While Mesoblast isn’t in the ASX 200 for the moment, some have speculated that it could soon be. The company’s share price has shot up from $1.11 on 23 March and its market capitalisation of $1.8 billion is higher than a number of companies currently included in the ASX 200 index.

Energy shares also came off a shade, though still remained elevated, as oil prices eased from a strong rally.

Woodside Petroleum Ltd (WPL) shares were still up 6.4% for the week so far – from Monday to Thursday – to $21.65, rival Santos Ltd (STO) leapt 9.7% to $4.76, Oil Search Ltd (OSH) jumped 10% per cent to $2.87. Meanwhile, Origin Energy Ltd surged 14.3% $5.53 and AGL Energy Ltd lost 4.2% to end at $16.39.

Petrol company Ampol Limited (CTX) said the crude oil market has weakened significantly. Tanker storage had increased, which pushed up freight rates. Adding to that, demand for jet fuel and petrol have fallen hard.

Even so, Caltex shares were still up 8.5% for the week to $24.34.

In economic news, Australia booked a record trade surplus of $10.6 billion in March, while retail spending rose by a record 8.5 per cent thanks to the panic buying that ensued in the wake of Covid-19.

How to trade indices: long and short

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For example, to buy (long) or sell (short) the ASX 200 index using CFDs, follow these easy steps:

• Create an IG Trading Account or log in to your existing account
• Enter ‘Australia 200’ in the search bar and select it
• Choose your position size
• Click on ‘buy’ or ‘sell’ in the deal ticket
• Confirm the trade