Bargain hunters move on yesterday’s casualties

10:56 AEST, Tuesday 21 March 2017

Bargain hunters move on yesterday’s casualties

By Ric Spooner (Chief Market Analyst, CMC Markets)

The soft lead from US markets has put the ASX 200 index on the back foot this morning.

However, support for one of yesterday’s weaker sectors is limiting declines in the overall index at this stage. Bargain hunters are taking the odds to Amazon, with consumer discretionary stocks like Harvey Norman and JB Hi-Fi attracting early support after being sold off yesterday.

Premier Investments have unveiled a solid result this morning in what has been a challenging result for some retailers. The successful expansion of its Smiggle chain in the UK is offsetting lower sales in some of the domestic brands. Managements’ success with Smiggle in the UK provides a good platform for today’s announcement that Smiggle will also expand into the Eurozone.

While the consumer discretionary sector has stabilised today, real estate stocks which were also out of favour yesterday are under pressure again. It seems that investors are looking through the lower bond yields seen in recent days and are positioning for higher rates over the medium term as the Fed leads major central banks into an era of tightening monetary policy.

The possibility of further restrictions on property investment loans is also weighing on bank stocks this morning.

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