What now for the ASX200 Index?

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Question asked 21/10/2023

What now for the ASX200 Index?

Hi guys, sorry for the repeat questions. I appreciate the call during the week from missing out late on a question last week, sorry, I couldn't answer though. Anyway, ASX200, how much bad news is already priced in and where could we be heading short term? Bond yields are pretty much at their highs again, although the index is still sitting higher. The news around the middle east is well known, so I would assume this again should be priced in, along with more potential rate hikes. With the knowns, it looks like the index is holding up pretty well. If these are already priced in, do you think the lows of the last year will hold; 6800-6900 range or could we see a knee jerk reaction down to 6400 with the next rate hike, oil price, middle east news? Regards, Simon

Answer

Hi Simon,

An extremely well timed question with the ASX200 testing 12-month lows, sub-6900, on Friday.

While we still anticipate a rally though November and December, largely for the reasons you mentioned, from & to where has become a tougher call.

We will be looking to increase our market exposure into weakness below 6900 but due to geopolitical issues, and rising bond yields, we cannot rule out a plunge down towards 6400 but its not our preferred scenario.
On an index level our current “best guess” into Christmas is a 6800 – 7400 trading range making current levels good risk/reward buying.

However we would clarify that MM still believes most value will be generated into 2024 through optimum stock/sector selection i.e. beneath the hood.

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ASX200 Index

LAST UPDATED 20/10/2023 13:24

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