Learn what moves the ASX 200’s price
Economic events
Economic events such as the market reaction to the coronavirus pandemic can affect the price of the ASX 200 – particularly if lockdowns on immigration or exports are put into effect.
News reports
Breaking news stories can have an effect on the ASX 200’s value. The extent of the impact will depend on the nature of the reports, but any domestic Australian news that will affect company performance could influence the price of the ASX 200.
Earnings reports
The earnings reports of individual companies listed on the ASX 200 can have a large impact on the price of the index. Since it is a market-capitalisation weighted index, the earnings reports of higher market-cap companies will tend to have the biggest effect on its value.
Interest rate decisions
Interest rate decisions by the Reserve Bank of Australia often cause fluctuations in the price of the ASX 200. Higher interest rates reduce borrowing and can therefore affect earnings growth. As a result, share prices tend to fall – which will cause a reciprocal decrease in the price of the ASX 200.
Strength of AUD
The strength of the Australian dollar will have an effect on the price of the ASX 200. If AUD is stronger compared to other currencies on the forex market, the index will likely rise in value, and if AUD is weaker, it will likely fall.
Price of commodities
Since the strength of AUD is tied to the value of Australia’s exports, the value of commodity metals such as copper or gold will affect the price of the ASX 200 – either positively or negatively – depending on whether the price for these commodities is increasing or decreasing.
