Viewpoint: Bullish
The news would imply otherwise but reopening bets have propelled Chinese equities towards their best month in years i.e. the markets are saying when not if, will Beijing shift away from its economically damaging Covid-zero policy.
WDS -0.35%: the energy company provided guidance ahead of their investor day later this week, with shares holding up despite the numbers disappointing,
US stocks retreated overnight on concerns China would tighten its Covid restrictions further weighing on global growth while the oil market recovered from early losses as OPEC considers further output cuts.
At this stage the company is primarily a nickel miner whose shares have rallied strongly, caught up on the ESG wave of optimism, even while the metal which generates most of its revenue has struggled.
WDS has rallied since September while crude oil has fallen to test its 2022 lows, ignoring the usual strong correlation in the process. Investors are clearly expecting crude oil to recover .
We believe SFR will need copper to regain its “Mojo” before it can attempt a rally towards $6 i.e. this will probably need China to calm down.
The ASX200 slipped -0.4% on Monday with weakness in the influential banks and resources stocks dragging the market lower e.g. Commonwealth Bank (CBA) and BHP Group (BHP) both fell -0.7%.
