Banks out of fashion as AUD Re-Enters 80c Position

End of month trading saw investors close off their open bets for a second consecutive session. The strength in Aussie dollar has spooked offshore investors as the local currency re-entered the 0.80 handle. Aussie stocks endured downward pressure as the local bourse moved further away from the allusive 6000 mark to trend double digit red for the entire trading session.

End of month trading saw investors close off their open bets for a second consecutive session. The strength in Aussie dollar has spooked offshore investors as the local currency re-entered the 0.80 handle. Aussie stocks endured downward pressure as the local bourse moved further away from the allusive 6000 mark to trend double digit red for the entire trading session.

Most major sectors were in the red throughout the session, with the exception of consumer staples.  Particular pressure was placed on the big banks as investors and international fundies unwound their exposure to the financials pending RBA D-Day next week. Collectively, financial-based stocks were down 2%, creating the heaviest weight on the local bourse. CBA shed over 2% to trade sub-$90 for the first in 7 weeks.

Supermarket giants provided the small glimmer of green for the  trading session. Following Wesfarmer’s 3Q sales beat yesterday, the stock traded upwards of 1.3% with “cheap cheap” rival Woolworths also tracking minor green for Thursday trading. Repatriation of funds from the session’s bank exodus were partially redirected into consumer staples.

Aussie dollar sell off during the trading session brought the local currency back under the $0.80 handle. The local currency is under extreme scrutiny as the market speculates on whether the RBA will make the cut next week. China Manufacturing PMI data due out on Friday will have a bearing on whether the dollar maintains the recent high.

For further comment from CMC Markets please call 02 8221 2135.

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