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Unwinding material anticipation

A shift in investor sentiment from positive European trading to falls in the US will have local investors on the back foot today. A stronger USD further battered commodities prices, which may compound the expected weakness given the anticipatory buying in resource stocks yesterday.
By · 22 Oct 2015
By ·
22 Oct 2015
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A shift in investor sentiment from positive European trading to falls in the US will have local investors on the back foot today. A stronger USD further battered commodities prices, which may compound the expected weakness given the anticipatory buying in resource stocks yesterday.

US crude oil inventories leapt by eight million barrels this week, double the consensus forecast. This surge in supply came despite increased refinery activity and a further fall in active US drilling rigs. Oil prices fell for the fourth session in a row. This is doubly bad news for locally listed energy stocks.

Traders were active in resource stocks yesterday. Gold stocks were the first to find support, lifting despite a three day tumble in gold prices. It appeared traders were anticipating an overnight turn around in the yellow metal. This enthusiasm then fanned out across sectors, and materials and energy stocks let the comeback rally as the best performers. This could mean additional selling today as the anticipated rallies failed to materialise.

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Michael McCarthy
Michael McCarthy
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