Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market started very negative with global sentiment before bouncing back to recover half the day’s loss and then sliding slightly further negative as the optimism waned. History tells us that in recent terror threat have not delivered a prolonged negative sentiment. We expect the current event to follow the same path despite the heavy loss of life. Japan went into technical recession with two consecutive quarters of negative growth. Energy stocks had a positive day on the basis that any retaliation by the West will create oil supply risk. We remain of the view that falling oil demand and rising supply means the dynamics will only change when OPEC moves to limit supply. Our markets are back at the fair value levels where we saw support over the past two months. Small Caps continues to outperform Big Caps while the 3 out of 4 large cap non-financial dogs (i.e. WOW, TLS, BHP and STO) had a better day. They seem to enjoy a psychological share price support…WOW @ $23…TLS @ $5…BHP @ $20…STO @ $4. (VIEW LINK)