Sunset Strip | Aussie market pulled back with global lead and falling commodity prices on the open before recovering most of the losses via yield stocks

Sunset Strip | Aussie market pulled back with global lead and falling commodity prices on the open before recovering most of the losses via yield stocks. The yield gap pressure was released with bond yield pulling back 5bps over the day. Turnover was just above $4.2billion. The big positive performances were led by VET (up 17%) on asset sales and gold stocks SLR (up 13%), PRU (up 8%), TRY (up 7%) and RSG (up 6%). The big negative moves were led by profit taking on IAU (down 8%), SXY (down 7%), RRL (down 7%), MRM (down 7%) and TGS (down 6%). Over the past 2 years that strong positive February returns leads to negative March returns while Mining stocks have seen profit taking in March since the China GDP growth outlook fell from 10% in late 2010. If we continue to see bond yield recover, then we would expect some of the stretched yield stocks (i.e. BHP, RIO, CBA, WBC, TLS, WES and WOW etc) will see more selling pressure. (VIEW LINK)