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Resources to inspire rally
9.35 am AEST Wednesday, 28 December 2016
Resources to inspire rally
By Michael McCarthy (chief market strategist, CMC Markets)
The Australian share market is set disregard a weak futures market lead from last week’s close. Improved performances from European and US markets in holiday trading and data released overnight should help trading sentiment. Rallies in important commodities and a more attractive level for the AUD could add to any positive momentum.
Japanese data released yesterday disappointed. Core retail prices, housing starts and construction orders all softened, and the jobless rate rose. In contrast, US numbers overnight showed an accelerating housing market and rising consumer confidence. This turnaround while Australian investors holidayed means catch up is on the cards today.
The further improvement in US economic conditions fed buying in copper and iron ore, as well as oil prices. The lift in these commodities saw the materials sector lead the S&P 500 index higher. The importance of materials to the Australia 200 index could mean a day of outperformance for Australia exposed share portfolios.
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