Steady open as market digest profit results
Stock markets appear to have found a resting place for the short term. With little macro news to influence investor thinking, it seems likely that the ASX 200 index will have a relatively steady opening.
Traders are likely to adopt a wait and see attitude with a busy few days ahead in the final week of the reporting season. Markets, especially the Aussie Dollar are also likely to remain risk averse ahead of key data on private capital expenditure later this week.
However, there was some profit taking on Friday after a relatively good week. Traders will be alert to the possibility that Friday’s profit taking might follow through as today’s session unfolds.
The relentless growth in oil inventories proved too much for the brief bout of short covering that followed last week’s news of a production freeze by Saudi Arabia and Russia. With oil prices under pressure again on Friday, the energy sector is likely to be out of favour today as oil enters a period of seasonal weakness in demand that’s likely to extend through to May.
On the other hand iron ore continues to inch higher. While the consensus outlook for the medium term remains bearish, spot iron ore prices have rallied $10 since their November low. If nothing else, this is a short term bonus for beleaguered iron ore stocks and provides some buffer against future price declines. Spot iron ore prices are now running into the technical resistance of their July lows. A push up through this resistance around $50-$51 would be a further positive development.
Frequently Asked Questions about this Article…
The ASX 200 index is expected to have a relatively steady opening as the market digests recent profit results. With little macro news to influence investor thinking, traders are likely to adopt a wait-and-see attitude.
The Aussie Dollar is likely to remain risk-averse ahead of key data on private capital expenditure expected later this week. This cautious approach is due to the lack of significant macroeconomic news.
There was some profit-taking on Friday after a relatively good week, and traders are alert to the possibility that this trend might continue as today's session unfolds.
Oil prices are under pressure again due to relentless growth in oil inventories, despite last week's news of a production freeze by Saudi Arabia and Russia. The energy sector is likely to be out of favor as oil enters a period of seasonal weakness in demand.
Iron ore prices have been inching higher, rallying $10 since their November low. While the medium-term outlook remains bearish, this short-term increase provides some buffer against future price declines.
Spot iron ore prices are running into the technical resistance of their July lows. A push up through this resistance, around $50-$51, would be a positive development for iron ore stocks.
The stock market's current behavior is influenced by a lack of macro news, profit-taking after a good week, and anticipation of key data on private capital expenditure. Additionally, oil prices and iron ore price movements are impacting specific sectors.
Investors should watch for key data on private capital expenditure, potential continuation of profit-taking trends, and movements in oil and iron ore prices, as these factors could influence market dynamics.
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