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


IG Markets: Afternoon Thoughts

IG Markets: Afternoon Thoughts

Good afternoon,

Across Asia, regional markets are mostly higher following the positive leads from Wall Street and M&A activity, with Google announcing a US$12.5b bid for Motorola Mobility Holdings. This boosted other mobile phone makers as participants looked for the next potential target. The Korean Kospi is the best performer, up 3.8% following yesterday’s falls. Elsewhere, The Hang Seng and Nikkei 225 are 0.4% and 0.2% firmer respectively while the Shanghai Composite is seeing some pressure, down a modest 0.3%.

In Australia, the ASX 200 is currently 05% weaker at 4259, just above its earlier session lows of 4255. Having enjoyed a 13.5% bounce from last week’s intraday lows it seems the local market has now run out of steam. Subsiding levels of fear have enticed some investors back into equities, but the broader market desperately needs some form of positive catalyst to see a sustainable move higher. While the consumer, industrial and healthcare sectors are all broadly positive, it is the financial, materials and energy sectors that are dragging the market lower, with losses in the vicinity of 1%.

The next few days of trade are going to be interesting indeed. We’ve seen a classic relief rally following last week’s tumultuous selloff. What happens from here is the big question? Do markets rollover and the sellers aggressively reassert their control or will there be a lot more buying support to absorb the selling. Only time will tell.

It looks like global markets have run up in anticipation of some sort of miraculous solution from tonight’s meeting between French President Sarkozy and German Chancellor Merkel. However, we think markets might have got a little ahead of themselves and possibly setting themselves up for disappointment. It could be a classic case of ‘buy the rumour, sell the fact’. Everyone seems to be calling for the introduction of euro bonds, however this is a lot easier said than done given the 17 members of the European Union.

From a technical perspective, we’re looking for the market to pullback from the recent rally in a nice orderly fashion and for it to form a higher low. The big key will be how aggressively the sellers look to sell the rally; if we see panic and fear return to the market then things could deteriorate rapidly once again. On the flipside, the longer rational thinking prevails, the quicker money will start to return to equities.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


Mediaworks: Reaches Agreement To Sell TV Operations To Discovery, Inc.

New Zealand’s largest independent commercial broadcaster MediaWorks and the global leader of real-life entertainment Discovery Inc. (“Discovery”) are pleased to announce they have reached a binding agreement regarding the sale of MediaWorks’ ... More>>


Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>


SAFE: Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea

Livestock carrier Gulf Livestock 1 sent a distress signal at 4:45am NZT yesterday in the East China Sea. The area is affected by Typhoon Maysak. At 4pm a patrol plane spotted a lifeboat - with no people in it - and a man in lifejacket nearby. The ship ... More>>


FMA: Kiwisaver Fees Don't Match Performance

The Financial Markets Authority (FMA) today published an independent report into the passive and active investment management styles [i] used by KiwiSaver providers. The FMA commissioned MyFiduciary to test the extent that KiwiSaver providers were ... More>>