Bulls Take a Breather

Australian stocks broke a two session winning streak on Thursday to settle around a 40 point loss across the session. The Federal budget was set aside to marinate after Wednesday’s knee-jerk trading. Retailers such as Myer and Harvey Norman fell victim to profit taking along with the four major banks.

Australian stocks broke a two session winning streak on Thursday to settle around a 40 point loss across the session. The Federal budget was set aside to marinate after Wednesday’s knee-jerk trading. Retailers such as Myer and Harvey Norman fell victim to profit taking along with the four major banks.

Material based stocks came under heavy selling pressure. Investors spent Thursday digesting uninspired production numbers from China and what it meant for the landscape of iron ore demand and the potential for more accommodative measures by the PBOC. Shareholders traded down the major miners BHP and RIO over 2% while Fortescue bled a painful 6.5%.

Qantas continues to fly following their investor day presentation earlier this week. The flying kangaroo has added 10% to its share price during the week’s trading and continues to soar, gaining 5% across the session.

Intra-sector rotation amongst the healthcare stocks kept investors on their toes. Resmed revealed poor research results in New York overnight which saw the stock price cut by a jaw dropping 18%. On the flipside, sellers of Resmed may have piled into Sirtex following the biotech’s announcement of an improvement in survival rates for their liver cancer patients. Sirtex enjoyed a 34% bounce.

The local currency may be creating a headache for the RBA as the dollar re-enters the 81c handle, a value local investors have not seen in four months.  Predominately the result of a weaker USD leg, the Aussie dollar may continue to maintain its renewed strength if unemployment claims due out of the US overnight are softer than market expectations.  

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