- ASX banks are a focus as the pandemic extends into the end of the month.
- Bank earnings are being digested following the COVID-19 lockdown.
- ASX has moved down to a rising support line ahead of the 23.6% Fibo.
Australian shares are pretty much flat at the start of the week’s trading with the ASX 200 Index travelling between a narrow 5,214.80 and 5,258.80 range on Monday, currently sitting at 5,238.20 and -0.08%.
Earnings are being digested following the COVID-19 lockdown weeks with NAB slashing its dividend and revealing a 51 per cent slump in first-half profit. In a trading halt, the bank seeking to raise an extra $3 billion by issuing 212 million new shares. NAB’s share price was $15.76 when the market closed on Friday. The bank has also slashed its interim dividend to shareholders down to 30 cents.
Banks are a focus as the pandemic extends into the end of the month considering how exposed banks are to the nature of an economic slowdown and the vast unemployment, bankruptcies and bad debts that will be no doubt surging into next month. The remainder of the big four also shared gloomy early fortunes. Indeed, investors will be worried that the big four will be resorting to cutting their dividends. ANZ is down 3.8% to $15.40 at the time of writing, while Commonwealth Bank is off by 2.6% to $57.36 and Westpac is down 4.89% to $14.60.
AUD/USD bid in Asia
Meanwhile, the Australian dollar has started on the front foot in markets today, +0.59% to 0.6431 from 0.6380. More on that here: AUD/USD refreshes eight-day high above 0.6400 amid risk reset
ASX 200 Index levels
The ASX 200 was capped by the 38.2% Fibonacci level (5470) and has since moved down to a rising support line ahead of the 23.6% Fibo. On a continuation to the downside, bears will be looking for an extension below the COVID-19 lows of 4402. A break higher will extend towards a 50% mean reversion at 5794 ahead of a 61.8% golden ration at 6127.
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