IG Markets Afternoon report

IG Markets Afternoon report

Good afternoon,

Across Asia, regional markets mixed following the relatively flat session on Wall Street. The Shanghai Composite, which resumed activity following a seven-day break, was playing catch-up, currently stronger by 3.1% to be the best performer. Elsewhere, The Hang Seng is up 0.8% while elsewhere, the Nikkei 225 and Kospi are both 0.2% softer.

In Australia, the ASX 200 is 0.1% weaker at 4688, well off its earlier lows of 4666. The market has been fairly defensively positioned for much of the session with the telecoms, consumer staples and property trust sectors among the best performers. The market’s comeback from earlier lows has been driven by the materials sector edging into positive territory despite a dose of profit taking across the commodity spectrum, while the financials and consumer discretionary sectors are the biggest drags.

We’re seeing relatively subdued trade across the Australian market today. Positive comments from Moody’s regarding China’s economic resilience, as well as suggesting a possible upgrade to their it’s sovereign credit rating has helped the market reverse earlier losses. But the bigger picture continues to be dominated by caution and profit taking ahead of tonight’s key nonfarm payrolls release.

Tonight’s release has bigger implications than usual. It should help settle any conjecture over both the necessity and size of any expanded quantitative easing (QE) program. On one hand, a weaker figure will almost certainly mean more QE while a stronger read could see these expectations decline significantly. Either way, we view it as a win-win situation for equities.

ENDS

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