By Chris Becker
A pause today across Asia – well more of a small slip as mainland Chinese markets came back after a week long holiday (oh how I would kill for one of those, although I’d miss the market). The ASX200 closed down around 12 points, remaining below 45000 points – I’ll take a closer look at the bottom of the post including technical analysis of the bourse.
The Nikkei 225 finished in positive territory after being in the red during lunch, with the Hang Seng 0.6% in line with the Shanghai Composite – currently down 0.8% in what has been a very muted response. Aussie bond yields rose again, now at 3.08% for the 10 year.
The Aussie battler (AUD/USD) is just sitting on crucial support at 1.0155 with the Euro/USD and US Dollar (DXY Index) swapping places again, the former slipping below 1.30, the latter firming slightly. Lots of daylight in that AUD chart below hey?
The undollar currency gold (USD) is having a poor day – off by over 1% as it rebounds off the psychologically important $1800USD per ounce level, whereas priced in AUD terms its only lost half a percent, although this has affected local gold miners, as you can see in the table below.
Australian Stocks
Industrials led the charge today, loving that lower AUD! Gold miner Newcrest (NCM) was hammered, losing over 3% whereas the finanicials have slipped slightly today. Check out this longer term chart and you can see why the bourse is getting pushed up – its not because of gold miners, or any miners for that matter – the financials sector is up 70% since its March 2009 nadir, whereas the broader market is only up 43% in the same period – lucky too because financials make up 42% – yes 42% – of the entire market:
So let’s hope house prices keep going up then hey?
As for the bourse itself, heres the daily chart – the US markets are closed tonight, so there’s been no real direction or view, which has come on the back of a so-so non-farm payroll report on Friday night. We get our unemployment print on Thursday – so it will be interesting to see – again – what happens this week: the bulls remain in charge. Look at that nice trendline – I expect a retracement back but no below 4400 points, which is healthy and normal for a rally – even down to 4300 or slightly below. But apart from financials what are you going to buy?
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Chris Becker is an investment strategist at Macro Investor, Australia’s leading independent investment newsletter covering stocks, trades, property and fixed interest. A free 21-day trial is available at the site.
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