Australian market defies the US lead again

Australian market defies the US lead again

By Ric Spooner (Chief Market Analyst, CMC Markets)
18 June 2013

The Australian market this morning continued the pattern of recent days where it has moved in the opposite direction to US markets.

This independent movement in the S&P/ASX 200 index has largely reflected action in local high yielding stocks like the banks and large supermarkets. These stocks are a little lower this morning as investors see less compelling value after two days of solid rises.

The chase for yield is in evidence in other sectors this morning with investor attention turning to the property sector this morning. Stocks like Westfield, Mirvac and Goodman Group have been among the better performing large companies this morning.

While the RBA Governor’s statement was unusually brief last month, the full minutes of the last meeting are unlikely to change investor views on the RBA’s current stance. This is that the Bank maintains an easing bias, noting scope to ease further if necessary and that any future decisions to do so are likely to be data driven and dependent on domestic economic conditions.

Markets will also focus on release of data on China’s property market today. Paradoxically, ongoing strength in major cities may be viewed with concern. China’s authorities clearly aim to moderate the property market, however any new initiatives do carry the risk of further weakening an already moderating general economy.

www.cmcmarkets.com

ENDS

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