Bear party resumes

Bear party resumes

By William Leys (Premium Client Manager, CMC Markets)
24 May 2013

The Australian market has failed to stem the bleeding after yesterday’s wretched performance.

While US markets closed slightly down again overnight, their losses have been relatively minor compared to those experienced in Europe and Asia since Bernanke’s testimony to Congress on Wednesday and yesterday’s disappointing Chinese manufacturing figures. The release of positive unemployment and new home sales data brightened the outlook, and it seems investors also reigned in their concerns relating to the impending stimulus wind down.

The relative calm in the US has done little to reassure the local investors though, and our market remains under pressure. The financials have resumed their downward trajectory at pace, and are weighing on the index. It appears as though the chase for yield has fallen from favour, with defensive stalwarts such as Telstra and Wesfarmers also weaken.

The Aussie dollar, which hasn’t had too many friends of late, staged a mini comeback against the USD overnight. In a volatile session, the currency fell to a low of 95.93 before surging back to 97.78 at one point. However, it has since retreated again to be trading around 96.80.

www.cmcmarkets.com

ENDS

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