Home / Investing / Weak October markets show mounting pressures weighing on sentiment

The ASX 200 fell 3.8 per cent over the month, the biggest fall this year, as investors sought to understand the impact of war, economic factors and other concerns on markets at home and abroad, according to Selfwealth.

Rising bond yields, geopolitical upheaval and the risk of further interest rate hikes all weighed on markets in October both domestically and in the US, with the S&P 500 down 2.2 per cent and the ASX 200 notching its worst monthly result this year.

While the 3.8 per cent ASX decline shows Australian shares are not immune from prevailing challenges in a rocky year, the regular “market darlings” remained popular trades, according to a Selfwealth report on October activity its share trading platform.

Pilbara Minerals (ASX: PLS) was the most traded stock (see table). Selfwealth pointed to Pilbara CEO Dale Henderson’s recent comments that the company cannot compete with Chinese refiners on lithium mining costs, prompting the stock to fall short for the month. It noted that investor conviction on the Selfwealth platform was high in terms of trade volume, with 67 per cent of trades being buys, but that “trade value tells a different story”: just 49 per cent of all dollars flowing through PLS were sells.

CSL (ASX: CSL) came in second, with 79 per cent of trades in the stock being buys. BHP (ASX: BHP) was third most traded on Selfwealth, but just 51 per cent of trades were buys, far below the August level of 69 pr cent.

“BHP is a fan favourite at Selfwealth, especially among our millionaire cohort, but its price chart has looked more like a cardiograph than a stock line this year,” Selfwealth brand and content lead Robert Marfell said. “Outside of the top 10 most-traded, we also saw big numbers flow into ResMed (ASX: RMD) – with an impressive 84 per cent of trades being buys despite the downturn – and Coles (ASX: COL) enjoying a tidy 83 per cent buys.”

Fortescue Metals (ASX: FMG) was the most-sold-off stock in the top 20 most-traded list, with 61 per cent of trades and 57 per cent of dollars flowing from sold shares.

Financials were a favourite among Selfwealth investors in October (see chart), with Macquarie (ASX: MQG) the most traded stock in this cohort, joined by Commonwealth Bank of Australia (ASX: CBA), Westpac (ASX: WBC) and ANZ (ASX: ANZ).

According to Selfwealth CEO Craig Keary (pictured), though, there are more insightful ways of assessing trade data than merely looking at volume.

“Beyond simple trade numbers, investor conviction is the best indicator of stock sentiment – and Selfwealth investor conviction was stronger for Westpac than any other big bank,” he said, noting that two-thirds of all Westpac trades were buys, with nearly $35 million trading hands, a dollar value surpassing even CBA.

The materials sector attracted more mixed investor sentiment over the month, with Mineral Resources (ASX: MIN) proving popular but other stocks, including Northern Star Resources (ASX: NST) and Rio Tinto (ASX: RIO), selling off.

In the US, Tesla (NASDAQ: TSLA) again led trading on Selfwealth, which Keary noted shows resilience among these investors in light of the company’s recent earnings miss and price dip.

“This kind of robust trading activity, which increased by 80 per cent month-on-month, along with a rising buy-to-sell ratio, is a testament to the confidence our investors have in the EV market’s long-term potential,” Keary said.

“Amid the broader turbulence in the US tech sector, it’s noteworthy that US tech ETFs like Betashares’ Nasdaq 100 ETF (ASX: NDQ) hold their ground as top contenders in our platform’s collective holdings,” he added. “Our data reflects a forward-thinking investor base that’s keen to engage with dynamic market conditions, reinforcing our commitment to providing a powerful trading environment.”