Market higher following offshore leads

Market higher following offshore leads

By William Leys (Premium Client Manager, CMC Markets)
8 May 2013

The Australian share market is higher in morning trade following strong offshore leads.

Equities in the US continue to climb higher after some surprisingly solid earnings and manufacturing data out of Europe added to the recent spate of good news. When considered with the global trend of central bank monetary easing, and the latest US payroll results, an improving global growth outlook is emerging. This positive sentiment saw the Dow close above 15,000 for the first time ever.

Locally, gains are broad based so far as investors contemplate yesterday's surprise rate cut. The materials sector is leading the way again, despite concern coming from some quarters that the RBA's decision is a signal that Chinese demand is slowing down faster than expected. The banks are also in the green, but their gains appear to be tempered by increasing fears a 'high yield bubble'. Investors wanting to move their money from cash to equities will no doubt be considering whether the defensive yield play has done its dash, and if it's time to rotate into some potentially undervalued cyclicals, which does not come without risk.

www.cmcmarkets.com

ENDS

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