Economic data from the US confirming a strengthening economy had financial markets fearing the Fed’s withdrawal of quantitative easing, wiping billions from equity indexes globally. The domestic market had to contend with tapering and a super-charged political week as government actions were thrown into the spotlight, adding to pessimistic investor sentiment.
On Friday, the market snapped six straight days of losses to close the week in the green. Despite the positive print, the ASX 200 has lost more than six per cent since a high of 5,441 reached on October 28. So far, December has not delivered a Christmas rally many were hoping for.
Despite equity markets selling off since October’s high, the healthcare index has proved to be resilient over the past month, only losing 0.5 per cent against a broader index decline of 4.3 per cent.
For the year, the health care index has led the broader market higher, adding 18 per cent against a nine per cent gain for the broader market. The sector certainly doesn’t have as much appeal as financials, but it has proved to be relatively resilient to weaker investor sentiment.
Serial downgrader QBE came out with an absolutely shocking earnings revision on Monday and the market was quick to slice 22 per cent off the share price. The rest of the week didn’t bring any joy for QBE as it finished some 30 per cent lower, giving up its gain for the entire year.
After the first couple of days of losses, there was no share price recovery – which is often seen after an earnings downgrade -- signalling the market is far from optimistic about the future for QBE.