Originally published by CMC Markets
The jury is out on whether the rally that began last Thursday is the beginning of a year-end burst to the upside or another blip in the drifting mode that has beset the ASX 200 since it peaked on 9th November.
It is not too late for a year-end rally to get underway. The final lift off in the 2014 and 2016 versions began on the 17th and 19th of December respectively.
Chart followers will want to see the index clear initial resistance at 6031 to provide evidence that the recent rally is establishing more conviction. Today may not be the day for this to occur. Despite new highs in the US market and a stronger iron ore price, traders will be cautious ahead of the upcoming US inflation data and Fed meeting.
There is potential for ongoing index related buying of retail property stocks over coming days as investors seek to maintain their weighting to the sector on the assumption the sale of Westfield Corporation (AX:WFD) will proceed. ANZ Banking Group (AX:ANZ) also attracted steady buying yesterday with investors anticipating a share buyback following sale of its life insurance business
The Aussie dollar looked to be another beneficiary of yesterday’s merger and acquisition announcements on the stock exchange. Both the Westfield and ANZ deals involve the purchase of major Australian assets by international buyers, potentially accounting for last night’s jump in the Aussie dollar.