Local shares range bound without any catalyst to move

Announcement posted by de2 Communications 23 May 2016

23 May 2016: SYDNEY --- Local shares are trading on a very tight range today and finding support on the lower range of 5300.

“There’s no new economic data that will act as a catalyst for an intraday swing,” said Gary Huxtable, private client adviser at Atlantic Pacific Securities.

According to Huxtable, the mentality of the market over the last 6 days has been very black and white.

“It looks like the market is considering 5300 too cheap to pass up, but an additional 100 points and everything gets too expensive (to investors),”

He added, “Until this dynamic shifts, we will continue to be range bound. But as markets go, the longer it remains in the range the more aggressive the eventual breakout will be.”

Among the sectors, Information Technology is the leader today, with Computershare doing most of the heavily lifting, buoyed by a corporate buy back and continued US dollar strength.

On the other hand, the materials sector – led by BHP, is being punished today on the back of a strong US dollar.

“This sector is also feeling the headwind effect of recent measures from Chinese regulators to hinder speculative activity on Chinese commodity futures markets,” Huxtable said.

He also pointed out that energy stocks are the laggards today following a pullback in oil prices.

“The price action of oil is far from surprising, with the most likely scenario further consolidation to eliminate excess supply, before re-attempting to push through $50 per barrel again, as such energy stocks are likely to remain range bound during this time,” Huxtable said.

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