How is the Woolworths share price managing to defy today’s sell-off?

Woolies shares are an island today. Here’s why this blue chip might be defying the markets…
The post How is the Woolworths share price managing to defy today’s sell-off? appeared first on The Motley Fool Australia. –

It’s been a rather dreadful start to the trading week for ASX shares so far this Tuesday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is down by 1.93% at around 7,330 points after the ASX 200 plunged by as much as 2.4% earlier this morning. But at least one ASX 200 blue-chip share has managed to defy this selloff. That would be the Woolworths Group Ltd (ASX: WOW) share price.

Woolworths shares are more or less defying the savage market selloff we’ve seen so far today. The company’s share price is still down at the time of writing, but by far less, currently trading down 0.4% at $39.16. Earlier, Woolworths was actually in the green too. 

That makes Woolies one of the only blue-chip ASX 200 shares to not see its value substantially sold off today. At the present time, all four of the big four ASX banks are well in the red. As are BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL) and Telstra Corporation Ltd (ASX: TLS). In BHP’s case, the iron ore miner has lost around 5.2%.

So what is saving Woolworths from the worst of today’s selling pressure?

Why is the Woolworths share price defying today’s ASX 200 selling?

Well, it doesn’t appear to be anything the company has done specifically. There have been no major news or announcements out today from Woolworths itself. However, we get a clue if we look at Woolworths’ major peers. The Coles Group Ltd (ASX: COL) share price is also outperforming the broader ASX 200 today. Coles shares are currently down by 0.2% at $18.79 each after breaking into positive territory at one point as well. 

IGA operator Metcash Limited (ASX: MTS) is itself in the green. Metcash shares are currently up by 0.4% at $4.79 a share. Endeavour Group Ltd (ASX: EDV), which used to be part of Woolworths, is doing very nicely, up 1.16% at $7.83.

Indeed, Woolworths’ ASX 200 Consumer Staples sector is leading the ASX so far today. All ASX 200 sectors are currently in the red. But the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) is currently the best performing one, with its 0.33% loss thus far today. 

So perhaps we are seeing what can often happen in a market selloff; investors looking for safety. For better or worse, consumer staples shares like Woolies are often sought out during fearful markets for their perceived safety. Since consumer staples shares by definition produce and sell life’s ‘needs’ like food, drinks and household essentials, many investors believe they are ‘safer’ investments during a downturn. Thus, shares like Woolworths often outperform the broader market during savage selloffs, like the one we are seeing today. That would explain why the entire consumer staples sector is performing well today too.

At the current Woolworths share price, this ASX 200 blue-chip has a market capitalisation of $47.73 billion, with a dividend yield of 2.4%. 

The post How is the Woolworths share price managing to defy today’s sell-off? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Woolworths right now?

Before you consider Woolworths, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Woolworths wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

5 things to watch on the ASX 200 on Tuesday

Top brokers name 3 ASX shares to sell next week

These were the best performing ASX 200 shares last week

These were the worst performing ASX 200 shares last week

Own Westpac shares? Here’s why the bank has just copped a further $100m in fines

Motley Fool contributor Sebastian Bowen owns Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!