The ASX is higher today, despite some volatile behaviour due to increased sanctions against Russia.
The S&P/ASX200 gained 30.80 points or 0.44% to 7,028.60. Over the last five days, the index has lost 2.83% and 5.32% over the last 52 weeks. The top performing stocks in this index were Clinuvel Pharmaceuticals (ASX:CUV) Ltd up 8.25% and Blackmores Ltd up 7.97%.
The Aussie dollar, however, took a dive as Russian President Vladimir Putin put nuclear deterrent forces on alert. The $A dropped 0.7% to US71.84 cents on Monday, but was still on track for a 1.6% gain in February.
The volatility in the market is likely to continue.
When Wall St begins trading later, it will be in for a heavy slide with SA&P 500 futures down 2.5%.
Nasdaq 100 futures were also flailing, down 2.8% and the Dow Jones futures were trading 1.7% lower.
According to UBS analysts, there could be one major winner in all of this mess.
Banks to outperform?
The outlook for Australian banks may be uncertain due to geopolitical tensions, however according to UBS analyst John Storey they should outperform based on their defensive qualities and relative safe-haven status.
The banks are up 3.2% since the start of February and have outperformed the share market by approximately 1.5% year to date, largely due to better-than-expected earnings updates.
"The big drivers of EPS upgrades from the street have come from higher NIM assumptions, lower than initially expected credit charges and cost out strategies," Storey said.
"Overall, our observations are that NIM compression has been roughly in line with expectations, but the market, in our view, is still not giving the banks the full benefit of the doubt on NIM expansion from interest rate increases."
Storey raised UBS FY22 EPS forecasts for all of the major banks except ANZ and increased price targets for all of the majors.
Storey’s top pick is Westpac, with 18% potential upside to his revised target price of $27.00 a share.
On the small cap front
- Patrys Limited finished 13.04% higher.
- Orthocell Ltd finished 5.13% higher.
- Perseus Mining Ltd finished 4.89% higher.
- Kazia Therapeutics Ltd finished 3.59% higher.
- Bellevue Gold Ltd finished 3.28% higher.
- Latin Resources finished 2.78% higher.
- Arafura Resources Limited finished 2.70% higher.
- RemSense Technologies Ltd finished 2.50% higher.
- Nickel Search Ltd finished 2.44% higher.
- Core Lithium Ltd finished 1.99% higher.
- Meeka Gold Ltd finished 1.96% higher.
- Gascoyne Resources Ltd finished 1.79% higher.
- Australian Potash Ltd finished 1.75% higher.
- Perpetual Resources Ltd finished 1.69% higher.