Politics doesn’t slow All Ords
While the Federal Budget and the Reserve Bank of Australia’s discussion on interest rates had the potential to impact the Aussie share market, the All Ordinaries Index continued to rise, according to Wealth Within’s chief analyst, Dale Gillham.
Granted the Budget wasn’t exactly controversial, politics tends to cause issues in the market, but according to Gillham, market volatility continued to ease, and was now reaching its lowest levels since October last year.
Gillham said to be wary of changes in the direction of the market though, as this is what tends to happen when volatility starts consolidating sideways for a period of time.
“Given the market did not pull back as far as I expected in the past month, but instead continued to make new highs, this could be a sign of a short-term change in direction,” said Gillham. “If the market continues to rise in the short term, then we will see a larger fall in the second half of the year.”
Looking at the sectors, Gillham said the information technology and materials sectors were top performances, while utilities and energy were bottom performers.
Gillham expects the All Ordinaries to either rise up until early May, and then fall in late May or June, or the current rise will stop in the next week and fall in early May.
“Either way, the longer term outlook is bullish for our market,” he said. “The sectors to watch in the second half of this year are Healthcare, Energy and Financials.”
The chart below tracks the performance of the market sectors for the year to date.
AUTHOR
Anastasia Santoreneos
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
