Australian Shares in Subdued mood with all eyes on election

Australian Shares in Subdued mood with all eyes on local election

The Australian Share Market is in a subdued mood this morning with no doubt the uncertainty of the local political election leaving investors on the side lines to begin the week. With talk now on the potential downgrade of Australia’s Triple A credit rating, all eyes continued to be front and Centre on the election this morning.

Given a number of other contributing events such as the RBA interest rate meeting, a closed Wall Street session tonight due to Independence day holiday and U.S employment data out on Friday we could see a risk off week after markets rallied back 2.4% high following the market’s reaction to Brexit.

Market Turnover heading into lunch was $924 million with a much quieter start to the week after we saw some huge turnover days on the market last week with Institutional investor’s quite active heading into the end of financial year, however I expect trend to fall with a more wait and see approach this week.

Given the U.S holiday tonight I expect a quiet afternoon of trade with no reason to open new positions amongst all the current uncertainty and speculation, so expect a flat finish to the session.
With all eyes on the political election it was no surprise to see some losses across the board, however the market did do well from around 10:45am to reverse most of the losses from early in the day.

The main lag on the index being the financials. Already under pressure in the low interest rate environment and with Labor’s proposed royal commission still up in the air the weakness was felt in the sector with ANZ (-0.77%), CBA (-1.33%), NAB (-1.70%), Macquarie (-0.63%) and Westpac (-1.16%) all seeing red to lead the market lower. Other lags include Telstra (-0.81%), QBE (-0.57%) and Suncorp (-0.99%).

Given the market uncertainty no surprise to see the more defensive Gold miners doing well. Newcrest (+3.98%), St Barbara (+2.17%) in positive territory. With Crude Oil moving higher on Friday we saw some good moves amongst the energy plays with Beach Energy (+1.19%), Origin Energy (+1.22%), and Oz Minerals (+3.58%) making some good gains to start the day. In the Iron Ore space, BHP (+0.84%) & Rio Tinto (+2.16%) also in positive territory to shrug off Iron Ore’s falls on Friday evening, with the big miners continuing their momentum from last week’s trade and helped the index shrug off the losses amongst the financials.

Indices
ASX 200 down 6 points
Dow Futures down 8 points
AUD/USD 0.7477

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