Easter stock hunt
The final day of trading ahead of the Easter long weekend started with mixed leads offshore. Traders looked to finalise their positions ahead of the four day break but volumes were skinny. Banks switched back into gear as yield play sat front of mind, led convincingly by CBA. This kept the market swinging between double-digit green for the entire session.
Expansionary China PMI numbers still resonate in investor’s minds as the market wrestled with a free-falling iron ore price. Iron ore producers endured concentrated pressure as investors elected to jump ship ahead of any further weekend commodity slippage. Fortescue Metals traded at a six year low with over 3% take off the stock across the session. The Iron ore producer has become one of the most popular stocks to short on the market.
Gold’s bounce overnight saw the sector handsomely supported across the board, up almost 5% as a group. The yellow metal was back trading at the week’s high, after the highest jump in over two months. Support for the precious metal was off the back of sluggish employment numbers from the US overnight, fuelling speculation across the board that the Fed may delay the imminent interest rate hike.
Australian trade numbers were released ahead of lunch and returned a widening deficit of $1.26 billion. The weakening dollar has not had the desired buffering effect on the balance of trade, as the deficit has seen three consecutive increases. Local stocks and the Aussie dollar had little reaction to the news. The dollar is maintaining position in late US0.75 ranges, however stickiness to this level may be dependent on reaction to Non-Farm Payrolls data due on Friday night from the US.
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Frequently Asked Questions about this Article…
The Australian stock market experienced mixed performance on the final trading day before the Easter long weekend. While banks, led by CBA, showed strength due to yield play, the market was also affected by a declining iron ore price, causing some volatility.
Fortescue Metals saw a significant drop in its stock price, trading at a six-year low with over a 3% decrease. This was due to concentrated pressure from investors who were concerned about the free-falling iron ore price and chose to exit their positions ahead of potential further declines over the weekend.
The expansionary China PMI numbers continued to resonate with investors, influencing their decisions as they navigated the challenges posed by the declining iron ore prices. These numbers are a key indicator of economic health and can impact market sentiment.
The gold sector performed strongly, with a nearly 5% increase across the board. This was driven by a bounce in gold prices, which reached the week's high following sluggish US employment numbers that fueled speculation about a potential delay in the Federal Reserve's interest rate hike.
The latest Australian trade numbers revealed a widening deficit of $1.26 billion, marking the third consecutive increase. Despite this, local stocks and the Aussie dollar showed little reaction, with the dollar maintaining its position in the late US0.75 range.
The Australian dollar's position in the late US0.75 range is significant because it reflects market stability despite the widening trade deficit. However, its stickiness to this level may be influenced by upcoming US Non-Farm Payrolls data.
The potential delay in the Federal Reserve's interest rate hike is being influenced by sluggish US employment numbers. This has led to speculation that the Fed may hold off on raising rates, which in turn has supported the gold sector.
Investors seeking further commentary from CMC Markets can contact them by calling 02 8221 2135.
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