Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Rising prices attract nervous investors

10.04 AEDT, Tuesday 20 November 2012

Rising prices attract nervous investors

By Ric Spooner (Chief Market Analyst, CMC Markets)

Major rallies in world equity markets last night represented one of those self-generating situations where rising prices themselves attract new buyers to the market. While there was not much news to trigger the rally, there are a lot of nervous investors who are underweight equities and other risk assets. Investors in this situation are very conscious of the positive event risk represented by a good outcome on the fiscal situation and the Greek government being successfully funded. In this situation, rising prices themselves attract investors nervous about missing out on a major rally.

The Australian market may underperform the US markets today. This reflects the fact that our market has not fallen as sharply as the US markets recently. The S&P 500 index has retraced around 62% of the June to September rally compared to 40% for the ASX 200. The US technology sector was one of the main contributors to last night’s rally with Apple climbing 7% after dropping 24% from its peak. This sector has only a very small representation in our leading index and could limit the size of the local rally compared to the US.

News that Moody’s has followed S&P in downgrading Frances’ credit rating may temper the risk on mood in early trading. With public debt at over 90% of GDP, France is vulnerable to any significant increase in borrowing costs and the market is sensitive to its potential as a long term problem for the Eurozone.

Energy stocks may be among the better performing local stocks today following the overnight jump in oil prices and in light of Shell’s announcement of a review of its Arrow coal seam gas project. This includes the possibility of combining it with one or more of the existing LNG plants currently under construction.

http://www.cmcmarkets.com/


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news