Steady as she goes…for now

It’s been a case of ‘steady as she goes’ for the Australian stock market, with the local index trading within a tight range before ending the day marginally higher.

The action, or lack thereof, is not a great surprise given the indifferent leads out of the US overnight. European markets were a little more lively, but certainly a few notches down on the session prior. The subdued conditions may be partly attributable to the apparent ‘solution’ to the Greek problem, as markets now shift their focus to the less theatrical, more traditional macro drivers, such as the bond market and equity valuations.

Locally, the big four banks have outperformed, as has blue chip favourite Telstra. On the other side of the coin, Fight Centre continued its dramatic descent, losing another 8% as investors continue to fret over the latest profit forecast. Gold miner Newcrest has also declined sharply, as the gold safe haven appeal diminished along with Greek default concerns.

Looking ahead, the calm may not persist for too much longer. This evening’s Eurogroup Meetings should provide a clearer indication on how ‘resolved’ the Greek situation really is. Markets have largely priced it in as a done deal, so any spanner in the works could trigger some sharp and rapid price adjustments.

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