Homepage de2 Communications newsroom

Atlantic Pacific Securities Market View: All sectors in the red

Announcement posted by de2 Communications 02 May 2016

SYDNEY -- 2 MAY 2016: Local shares are in the red this morning on the back of weak offshore leads and after Westpac reported a lower than expected earnings results.

“All sectors bar telecommunications are in the red this morning,” said Gary Huxtable, senior private client advisor at Atlantic Pacific Securities.

The banks have been the major drag on the index as the Westpac result has given the market a further indication of the overall industry dynamics.”

Huxtable pointed out that Westpac did announce a year on year dividend increase of 1 cent per share. But he said, “Decreasing earnings per share and increased stressed loans are the major concerns, and signal that there will be headwinds for the banks to continue to increase dividends moving forward.”

On the other hand, gold miners have been the best performers this morning after a sensational session in spot gold on Friday.

“Spot gold broke through previous resistance of $12.80 and appears to have broken out from a bull flag pattern,” Huxtable said.

“This is on the back of no further stimulus measures from the Bank of Japan last week despite further horrific economic data, indicating that even central banks are beginning to understand their own impotence.”

He added that “As markets lose faith in central banks, gold’s safe haven aspect has become quite attractive,”

“Combining with US dollar weakness, the recent spot price strength has pushed many of our local gold producers higher this morning, and is likely to continue.”

Huxtable also notes that the mining sector is also in the red with local miners BHP Billiton, Rio Tinto are also down this morning, despite continued strength in iron ore future prices. 

“Looking forward, there remains significant upside in consumer discretionary names should the RBA lower rates tomorrow,” Huxtable said.

-          ENDS –