Equity markets find their feet

Equity markets find their feet

By Niall King (Sales Trader, CMC Markets)
3 May 2013

The local sharemarket has advanced in early trade as the global economic recovery continues to lag in the distance behind corporate earnings and market valuations. Having stumbled recently as global growth concerns resurfaced, equity markets found their feet again overnight in the wake of surprisingly positive US jobless claims and the expected ECB rate cut. European policy makers finally came to the party, joining the US and Japan with their apparent intention to do whatever it takes to drag their economies from the doldrums.

Local equities have gained accordingly this morning with the Financials quick out of the traps followed closely by the Materials sector. The star performer of the morning so far goes to Macquarie with gains in excess of 10% following a strong profit and dividend announcement.

Having been knocked back in the past few days as risk came off on growth concerns, the Aussie dollar has regained stronger footing to $1.025 following the ECB rate decision. With this week’s domestic data failing to shine, clamour for the RBA to act on Tuesday is increasing.

A busy week of data ends with the much anticipated non-farm payrolls from the US this evening. Investors will watch on with interest for a guide as to which direction the US Fed will turn the dial on monetary stimulus. The Aussie dollar is unlikely to be immune from market moves on the back of this reading and may take its short term direction from here going into the weekend.

www.cmcmarkets.com

ENDS

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