Technical Selling Weighs on Australian Market
For the third time this year, the Australian market has tried to push through the 6000 level, but has retreated after coming within four points of what looks now to be a key resistance level. While the banks are relatively unchanged for the day, the miners and materials stocks have weighed on the markets as low iron ore prices continue to hurt the sector.
Trade numbers out of China added to the sell-off around midday as it came in well below analysts’ expectations. The sharp fall in exports is further evidence that the Chinese economy is slowing, while their stock markets continue to push higher. It is a sign of how difficult it is for policy makers in China to support growth as the stimulus measures seem to be driving asset prices rather than industry and economic growth. The local sell-off today is likely a combination of a slowing Chinese economy as well as technical selling.
Looking ahead this week, employment numbers in Australia are due on Thursday, which are expected to remain relatively steady. Inflation numbers for Eurozone and the US are out on Friday, which could provide traders with further clues to the timing of the rates moves.For further comment from CMC Markets please call 02 8221 2124.