Australia has become a major player in the world financial markets. As with the rest of the world, the covid-19 pandemic and the war between Russia and Ukraine has influenced the markets.
We want to look at the ASX 200 forecast, which is an important market index for Australian businesses. What is the ASX 200, and which companies populate it?
What is the ASX 200?
The ASX 200 is the leading benchmark index for the Australian financial markets. S&P Global provides the information on the index and is regarded as a world leader in this regard. As with all such indices, the ASX 200 forecast at capital.com bases in past performance and trends, hence it is an indication rather than an accurate measure.
The Australian Securities Exchange (ASX 200 or ASX 200 forecast) follows the top 200 companies in the country and like all such indexes is weighted by market capitalisation. Let’s have a closer look at the market sectors and the many businesses at the top of the index.
Which Businesses are in the ASX 200?
It is notable that global mining company BHP Group is the leading company by weight. Mining and materials are large constituent of Australia’s economy. The largest market sector is finance, with the following banks ranking high in the index:
- The Commonwealth Bank of Australia
- National Australia Bank
- Westpac Banking
- ANZ Banking Group
- Macquarie Group
Those five financial institutions account for 29% of the weighting. Other top ten companies include:
- CSL (healthcare)
- Woodside Energy (oil and gas)
- Wesfarmers (retail giant)
- Woolworths (supermarkets)
The combined index weight of the top 10 companies on the ASX 200 forecast comes to more than 47%, which is a firm indication of how powerful the top businesses are.
Although we have stated the index has rallied of late, it is still 6% down over the year to date. The slowing down of world economic growth has been an influence, as have fears that Australia is about to enter a period of quantitative tightening.
What Does the Future Hold for the ASX 200?
With uncertainty continuing in Australia about covid-19 and how it is being controlled, as well as worldwide economic instability, it is difficult to accurately predict the future state of the ASX 200 forecast, yet this is little different to other important world stock markets.
With the real estate market also in a slump – house prices are expected to fall by as much as 18% in cities over the next year – adding further concern there will be questions to be asked within finance circles about the ASX and its weighting.