The ASX is under pressure this morning, down 0.93% at 5203 after the release of Westpac’s disappointing results dragged financial sector stocks 1.68% lower this morning.
Westpac itself has lost close to 4% while the other majors have fallen in sympathy.
In a note to clients this morning IG Markets Chief Strategist Chris Weston said the Westpac results would set the tone for what could be a weak month ahead for the ASX and for the banks.
Stock price falls in May have become normal, Weston said, for both the 200 index and the financial sub-sector:
Statistically, May is the worst month to be long Aussie stocks with the ASX 200 losing 2.32% on average over the decade. This was largely a result of a dire period between 2010 and 2013 where the index lost 5.66% on average, although the last two years haven’t been all that bad (we lost 0.2% last May).
Still, when the financial sector saw its last positive May back in 2007 we know there are headwinds, with the average loss in the space 4.3% over the last ten years.