Aussie market in the green

17 June 2016:  SYDNEY -- Australian shares are on the front foot today on the back of rallies in European and US markets last night. 

“This baton of momentum was passed onto the Australian market this morning and most sectors are in the green,” said Gary Huxtable, client adviser at Atlantic Pacific Securities. 

According to Huxtable, “Financials are doing most of the heavy lifting this morning after reaching an oversold status from a technical point of view after a 5-day sell off,”

“Such a prolonged sell off is extremely rare for this sector, so it’s only natural that much of the market sees value at these levels and will temporarily support prices,” he said. 

However, Huxtable notes that technical analysis suggests the most likely scenario is consolidation for a couple of days before further downside heading into the end of the month. 

On oil, Huxtable pointed out that weakening oil prices will re-ignite concerns on bank exposure to the energy sector.

“Weakening oil prices will re-ignite concerns regarding the bank’s exposure to the energy sector, Brexit fears and tax loss selling are the likely catalysts for such a move,” he said. 

Over to gold stock, gold miners such as St Barbara Ltd (SBM), Evolution Mining (EVN) and Newcrest Mining Limited (NCM) are the laggards this morning. 

“The last two sessions have seen gold trade well outside its average trading range, and the market appears to have a bipolar view towards the safe haven asset as we head into Brexit vote shifting from one extreme to the other,” he said. 

Huxtable added, “Gold miners are likely to continue to feature in both the best and worst performers over the next week as the volatility continues."

                                                                                     - ENDS -