Local market flip flopped to finish in the positive mainly due to Resources. Market likely to remain volatile in the short term with macro risks while medium to long term view remains positive. The best performers were Miners, Energy and Utilities while IT, Staples and Health Care were the worst performers. Oil sector will be in play tonight with OPEC meeting expected to extend the cuts…US government is looking at selling up to half their strategic reserve to add more than US$16b to the budget…markets are also hoping that OPEC will deliver more than current cuts on top of extending the cuts. US shale continues to see rising rig count while Saudi Arabia and Russia talking about more cuts for longer. We remain of the view that oil is stuck between mid 40’s to mid 50’s till some left field event occurs. Chinese economy was hit by Moody’s credit downgrade and MSCI critical on equity market reform…bad news is good news as far as China is concerned for Australia. Deleveraging and pollution reduction has been hurting commodities….Shanghai Composite negative for the last 3 months…maximum China negative news flow…PBOC will have to turn the dial and support growth sooner than later. We are beginning to see stabilizing major commodities…TWI (Trade Weighted Index) has been consolidating and recovering over the past few weeks…Shanghai Composite up over 1% today…time to start accumulating Resource stocks!!!


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