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Overall valuation and performance on the index level

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Overall valuation and performance on the index level

Hi guys, sorry, another ASX200 question. How do you view the ASX200 at current level? I know we're having a hard time with the resources, but it seems we are largely under performing against others. After Thursday nights drop, do you see the valuation fair? I've been holding a position expecting the resources to find support and lift the index back to recent highs, or even new highs. After reporting had finished I thought that the index was well supported at the higher levels, but it looks like I may have been a bit to optimistic. I'd rather not be holding any decent sized positions in the coming weeks heading into May. Regards, Simon

Answer

Hi Simon,

Our “cautiously bullish” stance has been consistent over recent weeks, a dialled back stance compared to our very bullish view in 4Q of 2023. Overall you hit the nail on the head with resources, they are weighing on the local markets performance although they did enjoy an encouraging session on Thursday – the resource heavy UK FTSE is also struggling compared to US & European indices, while Japan’s Nikkei has made them all look pedestrian at times in 2024.

  • We believe the ASX must be evaluated at on a stock by stock & sector by sector basis as markets second guess if and when central banks will start cutting rates. As we said on Friday money is rotating intra-market as opposed to in & out of the market.
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