IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

Overnight, it was more of the same with headlines all essentially along the lines of ‘Stocks close lower on EU fears’.

Last night however, they were sharply lower on both sides of the Atlantic, as rising bond yields in Italy and Spain, ongoing uncertainty over Greece’s continuation in the eurozone and a poor pending homes sales report in the US saw investors heading for the sidelines.

Unfortunately, the poor offshore performance has us looking at another pretty bleak day for the local market. Heading into today’s session, the ASX 200 is up approximately 1.6% for the week after having been up about 2.25%. However, those gains are set to evaporate quickly on the open, with the ASX 200 called to unwind approximately 60 points or 1.45% lower at 4035 on broad-based losses.

As we have said quite a lot recently, now is not a time for making predictions by trying to pick the market on a daily basis. It is almost a futile exercise with unpredictable intraday gyrations seeing the market whipsaw around on an almost hourly basis. You almost need to adopt the attitude, ‘it is what it is’ and accept that we are going through once of those unpredictable, irrational phases where everyone is guessing what will come next and second guessing themselves; hence the increased volatility.

From our perspective, short of a complete blow-up in Greece, the local market should find strong support around the 4000 level. However, upside will be limited in the short term, certainly until there is some form of clarity around the Greek electoral process, which will not play out until mid-June.

Today, investors should brace themselves for another rough session, with most of the damage likely to be done in the morning as panic selling and margin calls take effect; the afternoon will potentially offer those cooler heads an opportunity to pick up some bargains.

IG Markets provides round-the-clock CFD trading on currencies, indices and commodities. The levels quoted in this email are the latest tradeable price for each market. The net change for each market is referenced from the corresponding tradeable level at yesterday’s close of the ASX. These levels are specifically tailored for the Australian trader and take into account the 24hr nature of global markets.

www.igmarkets.com.au

ENDS

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