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IG Markets - Afternoon Thoughts
IG Markets - Afternoon Thoughts
Across Asia, regional markets are mostly firmer, following on from the last hour rally on Wall Street and some positive breaking news out of the EU Summit. The Hang Seng is the region’s best performer, stronger by 1.9%, while the Shanghai Composite and the Kospi are higher by 0.7% and 0.6% respectively. The Nikkei is bucking the trend to be 0.1% weaker.
In Australia, the ASX 200 is currently 1.2% firmer at 4094, drifting from its earlier high of 4117, but well above its session low of 4032. Gains for the day are relatively broad based, with cyclical growth sectors such as materials and energy among the best performers, courtesy of some positive breaking news snippets out of the EU summit. Consumer staples and information technology are now the only two sectors in negative territory for the session.
Just when everyone was preparing for a boring end to the week and the financial year, a few EU summit headlines have jolted the market out of its malaise. Shortly after midday, the local market’s marginally negative position quickly turned into gains of more than 1%, with global futures rallying in unison, after a series of market-pleasing comments emerged from the meeting of EU leaders Some of the more pertinent headlines to hit the wires this afternoon include: EFSF funds for the Spanish bank recapitalisation process will not be senior to Spanish debt; the ECB will take over as common banking supervisor by December, and after doing so the ESM will be permitted to recapitalise banks directly; a long-term eurozone integration roadmap will be laid out in October and; the decisions taken during the summit will lay the groundwork for Eurobonds (not sure what Germany has to say on this point!).
These developments, the reactions to, and the analysis of them, are sure to make tonight’s European and US session highly interesting.
ends
Alastair Thompson
Scoop Publisher
Alastair Thompson is the co-founder of Scoop. He is of Scottish and Irish extraction and from Wellington, New Zealand. Alastair has 24 years experience in the media, at the Dominion, National Business Review, North & South magazine, Straight Furrow newspaper and online since 1997. He is the winner of several journalism awards for business and investigative work.
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