Daily Market Reports | Sep 18 2023
By Greg Peel
Thank You China
The Australian market showed signs all last week of built-up buyer demand, each day saving sessions from ex-dividend-driven early lows. The one exception was Wednesday, ahead of US CPI. Wall Street then gave the buyers the green light on Thursday night and Friday saw buyer demand unleashed.
The index shot up 100 points from the open. This could have been a cue for the sellers to step in on over-exuberance but then followed the Chinese data.
Chinese industrial production rose 4.5% in August year on year, beating 3.9% expectations and July’s 3.7%. Retail sales grew 4.6% against 3.0% expectations and ahead of 3.7% in July.
Fixed asset investment let the side down somewhat, rising 3.2% year to date against a 3.3% forecast and 3.4% in July. But unsurprisingly, this reflected a big drop in property investment.
The index hit 7319 at lunchtime, up 133 points, and that did seem a bit overwrought. Hence a fade to the bell and close of 7279, suggesting we’re not going to break through the 7300 pivot level without some work.
It won’t be today, with Wall Street having turned tail on Friday night and our futures down -41 points on Saturday morning. Although one might question the connection to companies making chip-making products and equipment.
Materials stole the show on Friday with a 2.5% leap, as iron ore prices crept ever higher. Energy gained 1.7%.
The banks did their bit with 1.0%, industrials also clocked 1.0%, and technology followed Nasdaq strength with 1.9%.
Even the consumer sectors got in on the act, with discretionary up 1.1% and staples 0.8%. Other defensives were less excited on the day – comm services up 0.6%, healthcare and utilities 0.3% and real estate 0.4%.
Bond yields were unmoved.