Australian stocks are on a roll
Australia’s benchmark S&P/ASX 200 Index has continued its dream run while most other Asia-Pacific stocks seem to be under pressure. In its fourth consecutive gain, the ASX 200 rose 1.74% on May 20 as surprise election results led to a rally. The index closed the day at 6,476, its highest level in over 11 years!
The banking sector was the star performer with a 5.9% gain.
In a surprise, the coalition led by the incumbent prime minister, Scott Morrison, won the elections held on May 18. Although exit polls predicted that the rival Australian Labor Party would win the election, the final result showed otherwise. Morrison is considered to be business-friendly and has promised a stable economy, more jobs, and tax cuts. The election was widely considered to be a climate change election—the opposition Labor Party had promised stringent emission cuts.
The iShares MSCI Australia ETF (EWA) lost 2.27% on May 17 but is expected to rebound sharply on May 20. The iShares MSCI ex-Japan ETF (EPP), which invests heavily in Australia, was down 0.94% on May 17.
Neighboring New Zealand’s NZ 50 Index also gained on May 20. The index rose 0.52% to end the day at 4,477.84.
South Korea’s KOSPI remained almost flat on May 20 after posting losses on May 16 and May 17. On May 17, the iShares MSCI South Korea Capped ETF (EWY) fell 1.25%, its second straight loss.
Singapore’s market was closed on May 20 on account of Vesak Day. The iShares MSCI Singapore ETF (EWS) fell 1.42% on May 17.