Six Thousand in Sight
Futures markets are indicating a soft start to trading today. The key question is whether the international investors who are the marginal buyers of Australian shares will be active. With the Australian dollar still around 78 US cents and 93 Japanese yen, the answer is probably yes, bringing the potential for further moves towards the six thousand mark for the Australia 200 index.
Soft US producer prices and the Greek soap opera should introduce a cautionary note, but may instead spur the bulls. The current global enthusiasm for shares is not driven by economic optimism but anticipation of European stimulus and a delayed US tightening. The minutes of the most recent US Fed meeting, released this morning, offer comfort to both hawks and doves, with the latter seizing on expressed concerns about sharp adjustments in markets once tightening begins.
The local reporting season passed the half way mark yesterday, and the overview stands in stark contrast to the market performance. Sales and earnings are down around 4% across industries on average, although there is huge variation from stock to stock and sector to sector. Yesterday’s $5.5 billion in trading suggests a high level of commitment from cash investors, adding to the possibility of further strong gains.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.
Frequently Asked Questions about this Article…
The Australia 200 index is showing potential for further moves towards the six thousand mark, driven by international investors who are likely to be active due to the current exchange rates of the Australian dollar.
International factors such as soft US producer prices and the ongoing situation in Greece are influencing the Australian stock market. These factors may introduce caution but could also spur bullish activity due to global enthusiasm for shares.
The current global enthusiasm for shares is not driven by economic optimism but rather by anticipation of European stimulus and a delayed US tightening, which are encouraging investors to remain active in the market.
The minutes from the recent US Fed meeting provided comfort to both hawks and doves, with concerns about sharp market adjustments once tightening begins, which has influenced market sentiment positively.
The local reporting season in Australia has passed the halfway mark, showing a contrast to market performance with sales and earnings down around 4% on average across industries, despite significant variation among stocks and sectors.
The recent trading volume of $5.5 billion suggests a high level of commitment from cash investors, indicating the possibility of further strong gains in the market.
With the Australian dollar around 78 US cents and 93 Japanese yen, these exchange rates are likely to encourage international investors to be active in the Australian market, potentially driving the Australia 200 index higher.
For further commentary on the market outlook, you can contact Michael McCarthy at CMC Markets by calling 02 8221 2135.
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