The ASX200 has fallen around three-quarters of a per cent over the last five days, including a drop of 0.63% on Thursday. This follows a spectacular month in March when the index gained over 6%.

The two sectors that offered investors the strongest gains, materials and financials, have given back a little of their wins, although energy continues to surge, up more than 25% this quarter, as oil prices remain high. Investors are watching two critical issues – the war in Ukraine, specifically the pressure it is putting on oil and gas prices, and the inflation-interest rate tension both in the US and at home, both of which have put pressure on global markets in recent days.

The ongoing strength in materials – in addition to (or perhaps a result of) their reputation as a traditional hedge against inflation – has resulted in a significant shift in trading patterns. Materials stocks are consistently taking out all of the top ten most traded companies, with financials featuring by value, but not by number of trades. Fortescue Metals Group (FMG) remains the most traded stock by value, given its favoured status among high-value traders; with the iron ore price still riding high at $US160, this trend will likely continue. BHP (BHP) however is close on its heels, as investors continue to accumulate. Nabtraders have no such love for Rio Tinto (RIO), however; it failed to even make the top twenty on Thursday.

After the big three, lithium and battery metals stocks continue their blistering run. The range of companies investors will look at has broadened from those in production phase, to hopefuls at various stages of development.

Lithium demand has skyrocketed as the war in Ukraine has put energy security in focus – those who may not have been convinced of the merits of decarbonisation have quickly come to realise that the benefits of securing cheap fuel from Russia were greatly outweighed by the risks. (Shell and BP were forced to divest billions of dollars of assets in the days following the invasion, with likely no chance to recoup their losses; Shell has written off $5bn overnight).

Renewables are therefore in focus, and attention has turned sharply to battery technology, which will be required to regulate supply. As lithium is a key input, stocks with any exposure are running hot. This week the frontrunners included Core Lithium (CXO), Sayona Mining (SYO), AVZ Minerals (AVZ) and Lake Resources (LKE), with Firefinch (FFX) a new name.

AVZ Minerals shares over twelve months (AVZ)

In financials, while the big four always generate activity, the fortunes of Magellan Financial Group (MFG) have captured the imagination of bargain hunters since its rapid fall from grace. Those who bought the company on each of its legs down as it lost its CEO and largest client, saw the medical leave of its star fund manager and reported billions in net outflow, were relieved to see that its funds under management had stabilised in an update on Thursday. The company’s shares bounced 10% on the day, and nabtrade holders sold heavily, suggesting many are happy to exit the stock.

Magellan Financial Group (MFG) shares over twelve months

On international markets, the same interest in energy security is continuing to buoy Tesla stock (TSLA), but one big investor feels they have done well enough, and sold down, while smaller investors continue to accumulate.

Tesla shares over twelve months (TSLA)