A solid session to end the week for Aussie stocks with the local market rallying over 1% with strong gains in some stocks, particularly in the IT & Materials sectors. Easing policy in China the main catalyst with banks cutting the five-year loan prime rate, which is used to price mortgages. As we’ve written numerous times recently, when China eases policy, they generally do so on multiple fronts which is clearly supportive of growth, a source of significant concern in recent times.
After looking good yesterday the ASX has flipped on a dime and sold off hard today following a poor night overseas thanks largely to weakness amongst the retail stocks. That theme washed through the ASX today with a 1-2 of rising costs and weakening demand from US-listed Target enough to see local investors indiscriminately dump the sector.
A solid session for the ASX with the market keying off a positive lead from US stocks, however, what was also obvious was buying of the intra-session dips that played out today, a theme that MM discussed this morning and a sign that bearish sentiment is starting the wane. Our preferred scenario is stocks now enjoy a decent bid tone through to the EOFY which implies areas that have struggled over recent times will stage comebacks of varying degrees i.e. tech and some commodity stocks have plenty of room to reclaim some of the recent weakness, which was an obvious theme today.
The ASX edged higher today thanks largely to buying in the Energy & Materials stocks while the Utilities were also strong. US Futures ticked up during our time zone, Hong Kong rallied ~3% while the minutes of the RBA’s recent meeting were released which showed they considered 3 different scenarios for rates, before taking the middle ground with a 0.25% hike.
The market was strong early with futures rallying ~75 points at the outset however weaker than expected data from China saw the market roll over mid-morning. IT stocks had a 2nd session of gains as bond yields continued to stabilize while a takeover tilt for Brambles (BXB) saw the Industrials fire up.
Friday’s green on the screen to round put a bit of shine on a pretty dull week for equities. All sectors traded higher into the weekend, no better exemplified than the worst sector for the session, Consumer Staples, still finishing +0.84%. Tech was the clear standout though, rallying more than double it’s nearest rival. The rally today wasn’t enough to offset the selling seen over the rest of the week with the ASX200 falling 130pts/-1.81% to post it’s fourth consecutive weekly fall.
Technology stocks were smashed today, the IT sector down 8.7% with 10+% falls commonplace at the large end, & 15%+ at the small end as big & consistent sell-orders rocked through the market. Slightly hotter than expected inflation data in the US overnight was the main catalyst it seems, but whatever the case, it was just one of those risk-off sessions that saw the index slide all day while the selling in some stocks was extreme. A terrible day for the market even though 2 of the big 4 banks finished the session up!
The market was in a holding pattern today ahead of important April inflation data in the US tonight – that number will likely drive the next leg up or down in bonds which will have a big bearing on equities. Looking at the volatility in the US market overnight (the Dow trading in an +/- 850 point range), it’s fair to say that there is a lot of indecision - traders are jumping at shadows while there is clearly some pain being felt around the place forcing a de-risking of portfolios, another 50 point...
An interesting session for the ASX with the futures indicating an open down ~100 points, however, that was short-lived with some large volume through the SPI knocking the market down by nearly twice that come 10.30 am, before a sustained recovery played out for the rest of the day. At its worst, the ASX200 was down ~180 points before bargain hunters emerged and the market finished ~110 points up from the morning nadir – a strong turnaround led by a recovery in technology with a large cross-section of stocks rallying more than 6-7% from their morning sell-off.
Broad-based selling continued for a second session as investors feared higher for longer inflation and a slowing global economy. Shares in resources companies were sold off on poor China export data which saw growth at a 2 year low on the back of lockdowns in a number of cities. Energy was one of the few exceptions with further sanctions on Russia’s exports tightening the market. Traditional low growth sectors of consumer staples and healthcare also managed to finish higher on a soft day while Real estate shares took the most heat as bond yields continued to rise.
After looking good yesterday the ASX has flipped on a dime and sold off hard today following a poor night overseas thanks largely to weakness amongst the retail stocks. That theme washed through the ASX today with a 1-2 of rising costs and weakening demand from US-listed Target enough to see local investors indiscriminately dump the sector.
A solid session for the ASX with the market keying off a positive lead from US stocks, however, what was also obvious was buying of the intra-session dips that played out today, a theme that MM discussed this morning and a sign that bearish sentiment is starting the wane. Our preferred scenario is stocks now enjoy a decent bid tone through to the EOFY which implies areas that have struggled over recent times will stage comebacks of varying degrees i.e. tech and some commodity stocks have plenty of room to reclaim some of the recent weakness, which was an obvious theme today.
The ASX edged higher today thanks largely to buying in the Energy & Materials stocks while the Utilities were also strong. US Futures ticked up during our time zone, Hong Kong rallied ~3% while the minutes of the RBA’s recent meeting were released which showed they considered 3 different scenarios for rates, before taking the middle ground with a 0.25% hike.
The market was strong early with futures rallying ~75 points at the outset however weaker than expected data from China saw the market roll over mid-morning. IT stocks had a 2nd session of gains as bond yields continued to stabilize while a takeover tilt for Brambles (BXB) saw the Industrials fire up.
Friday’s green on the screen to round put a bit of shine on a pretty dull week for equities. All sectors traded higher into the weekend, no better exemplified than the worst sector for the session, Consumer Staples, still finishing +0.84%. Tech was the clear standout though, rallying more than double it’s nearest rival. The rally today wasn’t enough to offset the selling seen over the rest of the week with the ASX200 falling 130pts/-1.81% to post it’s fourth consecutive weekly fall.
Technology stocks were smashed today, the IT sector down 8.7% with 10+% falls commonplace at the large end, & 15%+ at the small end as big & consistent sell-orders rocked through the market. Slightly hotter than expected inflation data in the US overnight was the main catalyst it seems, but whatever the case, it was just one of those risk-off sessions that saw the index slide all day while the selling in some stocks was extreme. A terrible day for the market even though 2 of the big 4 banks finished the session up!
The market was in a holding pattern today ahead of important April inflation data in the US tonight – that number will likely drive the next leg up or down in bonds which will have a big bearing on equities. Looking at the volatility in the US market overnight (the Dow trading in an +/- 850 point range), it’s fair to say that there is a lot of indecision - traders are jumping at shadows while there is clearly some pain being felt around the place forcing a de-risking of portfolios, another 50 point...
An interesting session for the ASX with the futures indicating an open down ~100 points, however, that was short-lived with some large volume through the SPI knocking the market down by nearly twice that come 10.30 am, before a sustained recovery played out for the rest of the day. At its worst, the ASX200 was down ~180 points before bargain hunters emerged and the market finished ~110 points up from the morning nadir – a strong turnaround led by a recovery in technology with a large cross-section of stocks rallying more than 6-7% from their morning sell-off.
Broad-based selling continued for a second session as investors feared higher for longer inflation and a slowing global economy. Shares in resources companies were sold off on poor China export data which saw growth at a 2 year low on the back of lockdowns in a number of cities. Energy was one of the few exceptions with further sanctions on Russia’s exports tightening the market. Traditional low growth sectors of consumer staples and healthcare also managed to finish higher on a soft day while Real estate shares took the most heat as bond yields continued to rise.
