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.
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.
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Frequently Asked Questions about this Article…
Banks are out of favor with investors due to the unwinding of exposure to financial stocks, as investors anticipate the Reserve Bank of Australia's (RBA) decision next week. This has led to a 2% drop in financial-based stocks, with major banks like CBA experiencing significant declines.
The Australian dollar's strength has spooked offshore investors, as it re-entered the 0.80 handle. This has contributed to downward pressure on Aussie stocks, moving the local bourse further away from the 6000 mark.
Despite the overall market downturn, the consumer staples sector is performing well. Supermarket giants like Wesfarmers and Woolworths have shown positive trading, with Wesfarmers experiencing a 1.3% increase following a strong sales report.
The RBA's upcoming decision is significant as it could influence investor sentiment and market movements. The anticipation of this decision has led to a sell-off in financial stocks and increased scrutiny on the Australian dollar.
The end-of-month trading session saw investors closing off their open bets, leading to a second consecutive session of downward pressure on Aussie stocks. Most major sectors were in the red, with financials being the hardest hit.
The China Manufacturing PMI data, due out on Friday, is expected to influence the Australian dollar's performance. It will help determine whether the dollar maintains its recent high, impacting investor decisions and market trends.
CBA's stock price fell below $90 for the first time in seven weeks due to the broader sell-off in financial stocks, as investors unwound their exposure ahead of the RBA's decision.
Funds from the sell-off in bank stocks are being partially redirected into consumer staples, as investors seek stability in sectors that are performing well despite the overall market downturn.
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