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ASX ends the year in the red despite December rally

The Australian sharemarket has finished the year in the red. Photo: Nicolas WalkerAn impressive rally in the last weeks of December has failed to get investors into the black for 2015, with the benchmark S&P/ASX 200 index finishing the year down 2.1 per cent at 5411.02 points.

But investors don’t need to look too hard to spot the battlers who held the index back – the two biggest segments of the Australian market, banks and miners, experienced a year to forget.

The ASX 200 closed down 0.45 per cent on a shortened day of trading on December 31. It was the first trading session since December 16 that the market had fallen.

The benchmark index entered December down 4.5 per cent for the year and was staring at a loss of 9.3 per cent when the market crashed to its lowest point for the year on December 15, on the eve of the United States Federal Reserve’s decision to raise official interest rates in America for the first time since 2006.

But as the market gained confidence that the further Fed rate rises would be gradual, stocks enjoyed an impressive rally. The ASX 200 added almost 8 per cent in the second half of December.

The ASX 200 Accumulation Index, which includes dividends paid, finished the year up 3.03 per cent. Wistful look back at April

Despite the December rally, investors can only look wistfully at those heady days of April, in which the market flirted with the 6000-point barrier, closing at a high of 5982.7 points on April 27 as low rates around the world pushed investors into equities.

But savage falls in key commodities such as iron ore (down 39 per cent for the year), copper (down 25 per cent) and oil (down 36 per cent) created carnage in resources stocks.

Credit Suisse analyst Damien Boey described 2015 as “flat as a tack”.

“All the returns happened in the dividends,” he said. “The consistent outperformers were really those stocks that had anything to do with technology – including healthcare stocks [such as] CSL, Cochlear and ResMed – or with US dollar exposure.

“It was more of the same of 2014 really, with people raising more question marks about the banks.”

The banks had been rocked by capital raisings, new macro-prudential regulations and a cooling property market in Melbourne and Sydney, Mr Boey said, although towards the end of the year, “some of those concerns dissipated a bit”.

The other key underperformers were the miners, which had gone from “bad to worse”. Tough time for defensive stocks

Defensive stocks like Telstra and Woolworths also had a tough time, Mr Boey said.

“The issue has been how defensive are these guys really, when they’re facing all sorts of structural changes in their business – competition threats, all those sorts of things.”

Mr Boey said the Santa rally had certainly improved the year’s performance, and was probably prompted by a growing sense of comfort with US monetary policy.

“People have viewed what’s happened with the Fed as not as bad as we might have thought.”

While beleaguered law firm Slater & Gordon took the title of the worst performer in the ASX 200, falling 86.3 per centfor the year, seven of the 10 biggest share price falls were recorded by resources companies or those in adjacent sectors such as engineering firm WorleyParsons, which tumbled 53.9 per centduring the year.

Origin Energy (down53.9 per cent for the year) and Santos (down 48.6 per cent) – which were both forced to raise capital as oil prices fell – were among the worst performers. BHP’s bad year

In addition to this, the list of stocks that had the biggest negative impact on the ASX 200 in 2015 was led by BHP Billiton, which was hit by falls in iron ore and oil prices. The company shares were sold off, then an accident at a mine it owns in Brazil caused an environmental and social diaster. BHP stock ended the year down 34.9 per cent.

But the list of the 10 biggest drags on the market was studded with blue-chip names, including ANZ Bank, National Australia Bank, Woolworths and Telstra.

The banks suffered a particularly tough year. Not only did regulators put the brakes on lending growth in the white-hot Sydney and Melbourne property markets early in the year, but a push from the Australian Prudential Regulatory Authority for the banks to hold more capital forced all of the four big to undertake capital raisings.

NAB finished the year down 9 per cent and ANZ was down 12.9 per cent. Westpac did better, up 1.8 per cent, while CBA rose 0.3 per cent.

The best-performing stock on the market was the vitamin-infused wellness company Blackmores, which saw its stock surge an incredible 517 per cent to finish the year at $217.98.

Mayne Pharmaceuticals (up 125.8 per cent for the year), Australian Pharmaceutical Industries (up 125.6 per cent) and Japara Healthcare (up 55.3 per cent) were other health-focused stocks to perform well.

APN Outdoor Group (up140.1 per cent), Evolution Mining (132.2 per cent) and fast-food giant Domino’s Pizza Enterprises (129.8 per cent) all posted triple-figure gains. Five key moments for stocks in 2015China’s market panic

The Chinese market tumbled more than 30 per cent after hitting a seven-year high in mid June, sparking fears the contagion from financial markets could spread to the wider economy. The market lost 4.1 per cent on August 24, but the Chinese government eventually got the crisis under some sort of control. Glencore hit for six

When shares in Glencore plunged almost 30 per cent on September 29 on the London exchange, over concerns about the company’s ability to withstand plunging commodity prices, resources stocks in Australia were also slammed as investors were reminded about the state of the resources sector. Iron ore’s big dive

In the midst of the Chinese scare, the price of iron ore dropped more than 10 per cent in one day on July 8, compounding the pain for miners such as BHP Billiton, Rio Tinto and Fortescue Metals Group. The Fed raises rates

Despite some nervous moments in the lead-up to the Federal Reserve’s rate rise on December 17 (including the Australian market hitting its lowest point for the year on the eve of the decision) equity markets took the decision in their stride and actually rallied. Blue chips turn red

Just days after the market hit its high point for the year, things turned ugly for investors on May 6 when $40 billion was wiped off the value of the market – and it was all the fault of the blue chips. Banking stocks plunged after Commonwealth Bank delivered an underwhelming result for the March quarter, while Woolworths dropped 5 per cent after its third-quarter results showed the retailer faced more pain.

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