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Atlantic Pacific Securities Market View: Materials and energy sectors shine as commodity strengthens

Announcement posted by de2 Communications 11 Jul 2016

SYDNEY -- Local shares opened strongly today on the back of positive jobs data from the US on the weekend.

“The numbers (US non-farm payrolls) didn’t disappoint, and the bulls have been proactive this morning, particularly within materials and energy after overnight commodity strength,” said Gary Huxtable, client adviser at Atlantic Pacific Securities. 

Bargains hunters on the move

“We’re also seeing some bargain hunters re-emerging in the recently beaten up financial stocks, particularly those with UK exposure,” he said. 

However, Huxtable notes that gold miners continue momentum with Telstra under-performing.

“Whilst gold miners are continuing their recent momentum this morning, other defensive names such as Telstra and utilities are under-performing the index,” said Huxtable. 

Huxtable notes that despite much noise surrounding the UK referendum and two US non-farm payrolls, the Aussie market has re-entered the 5300-5400 range.

 “Which it spent the best part of a month trading within throughout May and June,” said Huxtable. 

“For this market to break out the top of this range we need to see improving domestic economic conditions, or conversely hints of a Reserve Bank of Australia rate cut,” he said.

However, markets remain vulnerable to previously unknown consequences of a Brexit becoming known. 

Westfield reaches all-time highs

Among local shares, Westfield is benefiting from a strong NFP, as they are due to open their flagship World Trade Centre operation next month and poised to benefit from a strong labour market and increasing US consumer spending.  

“Despite also being exposed to UK property, they’ve (Westfield) avoided much of the selloff that we’ve seen in the likes of other UK exposed names, and technically have reached all-time highs. 

Other stocks performing well today are those that have come under recent pressure, with ANZ and WOW leading the banking and staples sectors.

“It appears to simply be a case of bargain- hunting. investors seem to look at these stocks as too cheap to pass up, as opposed to the risks that these sectors face moving forward.”

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For more information, visit:  http://www.apsec.com.au/