Volatility has returned to the market, with the ASX200 down over 2% during trade on Thursday, before closing down 1.77% to finish at 6838 points. The local market has lost nearly 7% over the last week and has entered a technical correction, having fallen more than 10% from its August highs. This follows similar falls on Wall Street, with the S&P500 now having erased all gains since July 2021, and the Nasdaq heavyweight Netflix down nearly 50% from its highs.

Markets are flailing as investors process Fed Chair Jerome Powell’s statements that all but confirm a March interest rate rise and the end of asset purchases that have provided support to the stock market to varying levels since the Global Financial Crisis. The inflationary pressure that is forcing the Fed’s hand is not being helped by Russia’s ambitions in the Ukraine, which has driven oil prices to their highest level since 2014. While the RBA is hoping to see significant wages growth before we can expect much higher interest rates, local consumers can expect rate increases in 2022 and global sentiment will continue to affect the local share market.

So how are investors like you responding to the volatility? Certainly not by hiding under a blanket. Volumes on nabtrade have doubled in recent weeks, as investors hope to find bargains in companies hit hard by the volatility. For those unwilling to take stock-specific risk, we’ve seen a huge rise in buying of the ASX200 in index form, with Vanguard’s VAS exchange traded fund among the most bought securities. For those concerned about further volatility, and seeking a hedge or trying to turn a quick profit, Betashares’ Strong Bear Hedge Fund (BBOZ) has also re-entered the trading numbers.

While Fortescue Metals Group (FMG) remains the most traded stock by value most days, weakness in perennial favourite CSL (CSL) has brought out the buyers in huge numbers. CSL closed Thursday below $250, just above its 52-week low and near its Covid lows. For those with longer memories, CSL was trading at about $350 prior to the Covid crash; while its proposed purchase of Swiss giant Vifor Pharma has resulted in a huge capital raising and increased debt levels, broker Citi has a price target of $340 on CSL and believes its acquisition will be broadly positive for the firm. Nabtrade investors were huge buyers on Thursday.

CSL Share Price over 12 months

Banks have been of relatively little interest to nabtrade investors over the last six months, with the exception of Westpac (WBC) which fell more than 10% on a disappointing full year update in November and was a strong buy. This week’s volatility has brought out those wanting to top up their financials exposure, with Westpac again the preferred choice of the Big Four, even topping the most traded stocks on Tuesday. Commonwealth Bank (CBA) was a strong buy under $95, while Nab (NAB) was actually sold on Thursday. ANZ (ANZ) is some way down the list as the least popular of the top tier financials. Macquarie Group (MQG) has recently traded as high as $217; it fell 3% on Thursday to be a popular buy around $180 a share.

Macquarie Group Share Price over 12 months

The soaring oil price, expected by pundits to top $US100 a barrel if sanctions are imposed against Russia for continuing hostilities against Ukraine, has bolstered the energy sector, with Woodside Petroleum (WPL) and Santos (STO) up 2.5% and 3.5% respectively on Thursday. Typically contrarian nabtrade investors took profits or trimmed their positions.

On international markets, weakness in popular names has brought out the buyers – but Tesla (TSLA.US) remains investors’ top pick. The stock is down 14% this month and is trading around its price last October, but a strong production report has buoyed the share price at the time of writing. Three-quarters of trades are still buys. Vaccine maker Moderna (MRNA.US) has announced it is commencing a trial for an Omicron-specific Covid-19 booster shot, which delivered a small boost to the company’s share price. Moderna shares are up just 2% over 12 months and are down more than 50% from their highs – nabtrade investors have been buying.

Moderna Share Price over 12 months