The Courier-Mail

Watch­ful in­vestors up periscope


BAR­GAIN hun­ters are be­ing en­ticed out of their bunkers af­ter the mas­sive volatil­ity that has rocked world mar­kets in re­cent weeks.

On Fri­day, the bench­mark S&P/ASX200 in­dex closed 30.3 points, or 0.58 per cent, higher at 5263.6 points.

The broader All Or­di­nar­ies in­dex was up 32.1 points, or 0.61 per cent, at 5274.7.

AMP Cap­i­tal’s chief economist Shane Oliver said the Aus­tralian mar­ket fin­ished last week down 16 per cent from its 2015 high as part of a broad global sell-off led by wor­ries about China and the pos­si­bil­ity of a US rate hike in Septem­ber.

“We have seen fairly sharp falls on mar­kets, be­tween 10 to 20 per cent in the ma­jor de­vel­oped mar­kets and in the emerg­ing world the falls are even steeper, and we have seen value re­turn to some de­gree,” Dr Oliver said yesterday.

“I think it is too early to say the volatil­ity is com­pletely over but there are some pos­i­tive signs out there.

“... and that will prob­a­bly pro­vide some op­por­tu­nity for in­vestors to hunt for bar­gains.”

The fu­tures mar­ket (up 12 points) in­di­cates a 10- to 15point rise at to­day’s lo­cal open.

It fol­lows an Aus­tralian profit re­port­ing sea­son that was “a lit­tle dis­ap­point­ing”, with only 43 per cent of com­pa­nies re­veal­ing bet­ter than ex­pected re­sults, he said.

In a busy week ahead for data, key fig­ures on the strength of the Chi­nese and US economies are due out to­day and to­mor­row.

On Fri­day, there will be US pay­roll em­ploy­ment data for Au­gust, which will be piv­otal to the Fed’s de­ci­sion on whether to raise US in­ter­est rates.

Aus­tralia’s Re­serve Bank meets to­mor­row and is widely ex­pected to keep rates on hold.

Aus­tralian GDP data is due on Wed­nes­day and Dr Oliver says if this un­der­shoots the con­sen­sus 0.4 per cent, it will add to the case for a fur­ther cut to in­ter­est rates, pos­si­bly in Novem­ber.

The Aus­tralian dol­lar closed on Fri­day at US71.67 af­ter plumb­ing US70.5 dur­ing the week.

“The broad trend in the Aussie dol­lar is likely to re­main down, par­tic­u­larly if those GDP num­bers are weaker than ex­pected on Wed­nes­day and ex­pec­ta­tions of another in­ter­est rate cut start to strengthen,” Dr Oliver said.

“We could be headed into the 60s (US cents). It’s just a ques­tion of when.”

 ??  ?? POS­I­TIVES: Shane Oliver.
POS­I­TIVES: Shane Oliver.

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