MARKET COMMENT: S&P/ASX 200 Up 0.6% Before China Flash PMI Data
February 24 2013 - 7:30PM
Dow Jones News
0000 GMT [Dow Jones] Australia's S&P/ASX 200 is up 0.6% at
5046.9 before the 0145 GMT release of HSBC's flash China
manufacturing PMI data. High-yield and defensive stocks are
outperforming, with major banks, Woolworths (WOW.AU), Wesfarmers
(WES.AU) and Westfield (WDC.AU) up 0.7%-1.6%. Resources are lagging
after commodity prices weakened. Rio Tinto (RIO.AU) is down 0.5%
and Woodside (WPL.AU) is down 1.9%. Relatively broad-based gains
have followed Friday's release of stronger-than-expected German
business confidence data and U.S. earnings reports which pushed the
S&P 500 up 0.9%. However, the S&P/ASX 200 had already
anticipated Wall Street's recovery from a steep decline which
followed FOMC minutes indicating increasing concern among Fed
members about the risks of its quantitative easing program. Traders
are now looking to see if the index can break Friday's peak at
5055.3. "The rally in the Australian market since last November has
been remarkable for its orderly progression and low volatility,"
says Ric Spooner, chief market analyst at CMC Markets. "However,
investors are starting the new week conscious of the increasing
risks that this behaviour pattern may change. Last Thursday's high
turnover and 2% decline provides an insight into the market's
potential for a sharp decline. There is now more potential for
significant market moves in either direction."
(david.rogers1@wsj.com)
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