IG Markets - Afternoon Thoughts

IG Markets - Afternoon Thoughts

FTSE 5700 -14
DAX 6745 -13
CAC 3256 -8
IBEX 6627 -6
DOW 12904 -39
NAS 2658 +2
S&P 1373 -4

Oil 92.96
Gold 1583

Across Asia, markets are mostly lower, with a lack of fresh leads resulting in quiet consolidation and a degree of profit taking. Despite some fairly positive leads from US trade, it seems investors are content with the gains they have already enjoyed this week. The Aussie dollar enjoyed a big week with strong advances against the greenback. However, AUD/USD has been fairly flat today and is consolidating just above 1.04. This has been the typical price action in most risk assets in the Asian session. The US dollar did not get any help from today's generally soft US data and it seems the pressure will remain as long as talk of easing continues.

Looking at the equity markets in the region, Japan’s Nikkei is 1% lower, hurt by a stronger yen. Hong Kong’s Hang Seng is outperforming the region with a 0.2% rise, while the ASX 200 is relatively flat and the Shanghai Composite down 0.4%. In light of the price action we are seeing in the Asian region, European markets are facing mild losses at the open. US markets are facing modest losses of around 0.3%, which effectively erases yesterday’s gains. EUR/USD has managed to shake off the effects of the weak Spanish bond auction, but conviction is clearly lacking in a market facing a relatively light events calendar. Apart from German PPI, there is not much to look out for on the economic front today. As a result, we could see a fairly quiet end to the week across global markets.

The local market has had a very impressive week and is up 3% at current levels. After having dipped to 4186 earlier, the ASX 200 recovered and has mostly traded flat this afternoon. As we mentioned earlier, the ASX 200 is testing the 200-day moving average and a close in positive territory today could result in further positive momentum. The industrials have been the best performers today with Toll Holdings (+6.3%) being the standout. Reports that Paul Little could be returning in a director’s role could have sparked the rally. The materials are up with the big miners, BHP Billiton (+0.9%) and Rio Tinto (+0.5%), holding up well. Fortescue Metals has bucked the trend with a 3.3% decline Elsewhere in the resource space, the energy sector has failed to capitalise on the oil price rise with most stocks weaker, except for Woodside Petroleum which is up 0.4%. Financials took a breather after their recent run with the big four banks in negative territory.
www.igmarkets.com.au

ends

© Scoop Media