Market Update - October 22, 2013

• The Australian market is trading higher, buoyed by a jump in BHP shares on the back of a strong production report, but investors remain wary ahead of US jobs figures.
  
• Mining giant Rio Tinto is likely to axe hundreds of back office jobs after signing an outsourcing deal with US technology company IBM. io has signed a $100 million, 10-year deal with IBM that will allow the miner to cuts costs in areas such as human resources, finance, information technology and procurement.
  
• Shares in the country's two biggest banks, Commonwealth and Westpac, are edging ever closer to their record highs of earlier this year.
  
  
  ASX 200 

Australian Share Market Outlook - October 21, 2013

• Major banking shares ended higher today, with National Australia Bank (NAB) the only big player to touch a lower end. ANZ Banking Group finished 0.82 per cent or 26 cents higher to $32.12.
• The smaller company Rio Tinto touched 0.5 per cent higher today after jumping by 3 per cent last week. Australia’s second largest miner recorded a 4 per cent rise in iron ore shipments last quarter and a 23 per cent jump in mined copper. Tomorrow, Oil Search will issue its third quarter production numbers.
• According to a weekly report issued by the Australian Institute of Petroleum, the average price of unleaded petrol rose by 0.1 cents per litre to 151.0 cents last week.
• A strong Australian dollar together with a widening margin makes a 2-3 cent per litre fall in petrol prices a real possibility over the next fortnight. 
• At the close, 1.85 billion shares changed hands, worth $3.73 billion. 575 stocks finished higher, 408 ended in the red and 316 closed flat.

ASX Shares Tips

Banking Stocks are Pushing High

Today, Banking stocks are pushing record highs, but the upside may be running out for investors. 

The financials sectors has surged 25.7 per cent in 2013, outperforming the benchmark S&P/ASX200, which is up 15.2 per cent in the same period.

The fragility of bank stocks was seen earlier this year after US Federal Reserve chairman Ben Bernanke announced the central bank’s intention to begin tapering sometime soon, which was quickly followed by a 12.3 per cent fall in the financial stocks index.

ASX Tips

S&P ASX 200 ripe for another strong rally!!!

The S&P ASX 200 index has shown a strong positive trend according to Weekly charts. A rising wedge patter is close to break at the 2/3^rd of its completion and this level is at 5410. The Fibonacci retracements shows that there is strong resistance at 5480 which is where a gap lies and should be filled according to the GAP theory. The prices have been in a consistent uptrend for the past 9 weeks shown by the parallel uptrend channel. A break in this channel will lead to a surge till 5560 and then subsequently 5680. Hence, 5410 is a key level and a close above that level for 2-3 trading sessions will lead to rally till 5680 in the coming sessions.  

Australian Dollar Appreciation

This is how Australian dollar appreciated against US dollar in past 4 years.

Australian Dollar made a 4-month High on Oct 16, 2013

Australian markets are confident that US economy will avert the disastrous default, but still the rising government debt is unsettling the investors. This uneasiness reacted on Australian economy as currency hit a four-month high of US95.4c and the S&P/ASX200 jumped over 1 per cent to deliver to its best close for two weeks of 5260 points. 

The Treasurer is also saying that : "If US suffers a heart attack, without doubt it will affect the rest of the global economy." He added further, "We have back-pocket plans to deal with whatever arises over the next few weeks as a result of negotiations."

Australian Market Updates

An Interesting Infographic about Australian Financial Services Sector