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Rallies in industrial commodities following the announcement of further targeted stimulus measures in China should help Australia shares back into positive trading later today, after a likely weak start that follows European shares lower. A US holiday and important data later in the week may see a subdued Asia Pacific trading session after yesterday’s strong rallies.
The announcement of one thousand new infrastructure projects in China has turned the outlook for industrial commodities. Copper, iron ore and oil are all higher this morning as markets factor in this most recent demonstration of commitment to stabilising China growth rates around 7%. The news should see energy and materials stocks lead the market. A focus on top operators and world class assets should see BHP and Woodside in the spotlight today.
Traders will watch the action in Shanghai today for any signs of follow through on yesterday’s stimulus inspired rally. However, the release tonight of US housing, manufacturing and durable goods numbers may see a cautious overall approach. The Australia 200 index sits just below a key level, and success or failure around 5750 could determine market direction for the next days and weeks.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.
Frequently Asked Questions about this Article…
China's announcement of one thousand new infrastructure projects is expected to boost industrial commodities like copper, iron ore, and oil. This could positively influence Australian shares, particularly in the energy and materials sectors, as these commodities are crucial to Australia's economy.
BHP and Woodside are likely to be in the spotlight because they are top operators with world-class assets in the energy and materials sectors. China's stimulus measures, which aim to stabilize growth rates, could increase demand for commodities, benefiting these companies.
The Australia 200 index level of 5750 is a key threshold. Success or failure to maintain this level could determine the market direction in the coming days and weeks, making it an important focus for traders.
Upcoming US economic data releases, including housing, manufacturing, and durable goods numbers, could lead to a cautious approach in Asia Pacific trading. These data points are crucial for assessing the US economic outlook, which can influence global markets.
Industrial commodities like copper, iron ore, and oil are central to the current market outlook due to China's infrastructure projects. Their price movements can significantly impact energy and materials stocks, influencing overall market performance.
A subdued trading session in the Asia Pacific region might occur due to a US holiday and anticipation of important US economic data releases later in the week. These factors can lead to cautious trading behavior.
Traders can benefit by focusing on energy and materials stocks, which are likely to lead the market due to rising industrial commodity prices. Monitoring key market levels, like the Australia 200 index, can also provide trading opportunities.
Investors should watch for any signs of follow-through on the stimulus-inspired rally in the Shanghai market. This could indicate the strength and sustainability of the recent market movements influenced by China's infrastructure announcements.
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