The ASX share market has recovered significantly over the past year from the pain of the coronavirus crash, also called COVID-19.
Looking at the ASX 200 (ASX: XJO), it has gone up almost 50% since 23 March 2020. That’s a strong performance. Investors concerns have subsided regarding the economy and businesses after strong levels of central bank support and government stimulus.
But what’s happening now with the ASX share market?
A key part of the ASX 200 recovery has been the rebounding performance of the big four ASX banks of National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA).
There was a painful amount of loan impairment provisions put in last year, but that’s simply not repeating in the latest results.
Turning to iron ore, the big Australian miners are strongly benefiting from high iron ore prices which is seeing the dividends roll in. Compared to a year ago, the miners of BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) have delivered big returns over the last 12 months.
Consumer discretionary spending remains elevated, particularly in some online categories. Just look at Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH), Adairs Ltd (ASX: ADH), Nick Scali Limited (ASX: NCK), Kogan.com Ltd (ASX: KGN), Beacon Lighting Group Ltd (ASX: BLX), Shaver Shop Group Ltd (ASX: SSG) and Temple & Webster Group Ltd (ASX: TPW).
It’s also fair to say that the travel sector is still suffering from much lower levels of activity – Webjet Limited (ASX: WEB), Qantas Airways Limited (ASX: QAN), Flight Centre Travel Group Ltd (ASX: FLT), Sydney Airport Holdings Pty Ltd (ASX: SYD), Corporate Travel Management Ltd (ASX: CTD) and Helloworld Travel Ltd (ASX: HLO) are all still being affected. However, they’re all looking forward to a recovery from the COVID-19 impacts.
The strong Aussie dollar has also had interesting impacts on certain areas of the ASX share market and the economy.
Where to invest next?
It’s impossible to say what the overall share market will do in the coming months, or what sectors like resources can achieve because of the unpredictability of commodity prices.
Some investors are always trying to stay one step ahead of the market and have been ‘rotating’ out of tech shares and into areas hit heavily by COVID-19 impacts.
So I actually think that some of those ASX growth shares in the tech space that are being sold off could be long term opportunities like Kogan.com and Pushpay Holdings Ltd (ASX: PPH).
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