For the ASX to extend its year-to-date return it clearly is going to need more positive earnings surprises and that’s far from a given.
Last week’s topping of the 5800 mark reflected strong results from some key corporates including Commonwealth Bank and CSL. The ASX though dipped on Friday after a weak lead from Wall Street and the same is true for this morning.
Over the weekend the Dow was flat, the S&P 500 edged 0.2 per cent higher and the Nasdaq advanced 0.4 per cent as investors opted for the sidelines ahead of a three-day break. US markets are closed on Monday for the Presidents Day holiday.
The Australian dollar pulled back slightly, down 0.4 per cent to US76.64¢.
“There is a certain level of indecision among investors now, but I won’t say there is outright bearishness out there,” said Gary Huxtable, client adviser at Atlantic Pacific Securities. He added that while the local market has reached 20-month highs over the last few sessions, investors seem torn.
“Investors are split between thinking that is as good as it will get for a while on the one hand and are taking money off the table, whilst others believe that signs of such highs are just the beginning and taking it as an entry signal to get into the market,” said Mr Huxtable.
To build on the ASX’s two-week advance, it’s up to, among others BHP Billiton and Westpac on Tuesday; Coca-Cola Amatil and Woolworths on Wednesday; Crown Resorts, Flight Centre and Qantas on Thursday; and Charter Hall and Mayne Pharma on Friday.
There will be little help initially this week from base metals, which mostly slid in London over the weekend paced by copper.
The red metal failed to get much support from Freeport-McMoRan, the world’s biggest publicly traded copper miner, which declared force majeure on copper concentrate shipments from its Grasberg mine in Indonesia amid an enduring exporting dispute with the government. Shares of both BHP and Rio Tinto slid more than 1 per cent in New York. Mining stocks were a drag on London’s FTSE 100 too: BHP slid 1.8 per cent, Rio was down 1.3 per cent.