Mathan Somasundaram

Aussie market started positive and moved higher before giving some back as the day went on with US worry remaining fresh. The US market DOW JONES index dropped as much as 560 points overnight before recovering to close down 250 as global market jump on shadows to sell out. Asian markets were stable and positive today with China moving to limit capital outflow and also inject more cash to remove and credit squeeze pre Chinese New Year. The restriction on capital outflow will have negative impact on house prices while recent new home sales data shows negative growth with big drop in apartment sales. Property boom finished in 2015Q3 and the market is now dealing with falling clearance rates, falling rentals, rising interest rates while China boost may start to wane. There were clear signals that market was moving to cover a lot of shorts today as a number of dogs bounced on very little news. We are unlikely to see investors taking a big bet on a Friday, so be mindful that market might be negative tomorrow. (VIEW LINK)


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