Market rotation with resources the main beneficiary
Some big sector rotations in the market today with the Financials and Resources on either end of the spectrum – Financials down –1.12% while Resources stormed higher by +2.47% after the Fed hiked rates in the U.S overnight, however was more dovish in their guidance than the market was positioned for. As we suggested in the PM report yesterday, a case of buy the rumour sell the fact was clearly obvious.
The market opened higher this morning but given the composition of the index, always struggles to make ground when the banks are down. The BIG 4 BANKS detracted -20pts from the index today which is a big drag. We had a range today of +/- 36 points, a high of 5801, a low of 5765 and a close of 5785, up +11pts or +0.20%. Once again, the 5800 is proving hard to overcome on a close basis and this needs to give way before the market can plow on up to 5900…
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
As suggested above, it was a tail of two markets today with the banks dragging while the resource companies copped a decent bid. Our recent purchases of BHP and RIO are starting to look good with BHP cracking up through $25 today closing on its highs…up +3.72%
BHP Daily Chart
Golds were also strong courtesy of a weaker US dollar overnight. A weaker $US on a rate hike is clearly counter to what some thought however as we’ve written numerous times, the mkt was very long the $US which sets up a solid foundation for disappointment…We hold Evolution (EVN) and Regis Resources (RRL) in the Market Matters portfolio from lower levels.
Evolution (EVN) Daily Chart
Have a great night,
The Market Matters Team
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