The Australian market opened on a positive note as the United States markets ended higher. But the small positive opening has fizzled out and the markets are trading in the red last time, we checked. This is a news based week.

On Monday, we had the Reserve Bank of Australia cutting rates. On Tuesday, we did see the economic growth slump to 3.1 percent. But, even though, all these are negative news, the market has been quite strongly facing it. There is strength in the markets and that is showing up.

The slightest bit of positive news is taken in by the markets positively and a clutter of bad news is not able to drag the market down.

In a speech, yesterday, Philip Lowe, RBA deputy governor, said, “It should not really come as a surprise that countries that are in relatively good shape and have not seen large-scale expansion of the central bank balance sheet are experiencing stronger currencies than those that are in relatively poor shape. This is one of the mechanisms through which the weak conditions in most of the advanced economies are transmitted to the rest of the world.”

Technical Analysis:

The markets opened on a strong note. But as the day is passing by, the markets are giving up their gains are slowly moving in to the negative territory.

The ASX was trading flat at 4517, last time we checked. The markets are trading at this important support level of 4500 which the markets are respecting in spite of all the negative news.

Overnight, there were talks between United States President Obama and the Republican House Speaker John Boehner. The United States markets moved in anticipation of some positive news from this front.

Important stocks to watch out for:

Boral is in the news today after the company said that it would cut 90 jobs because of a close down of a Victorian cement plant. The stock was trading flat at $4.05 last time we checked.

Nufarm is also expected to report earnings and the company expects to grow 15 percent in the first half of the next financial year. They say that this is backed by a strong performance in South America and Europe.

Ten Network is again reforming its company and said that it is concentrating on more cost cutting plans. In light of the company’s poor performance, the company is all set to offer %230 million new shares. Shares of the company were trading flat at 32.5 cents.

Forecast:

The yearly high of the Australian stock markets stand at 4650 and that level is nearly 3 percent from here. That level is to be watched carefully as many of the analysts are suggesting a breakout. All the global markets have been trading flat in spite of bad global events.

This shows that the markets are quite clearly poised for an up move in the nearby future. This important support level of 4500 is doing loads of good for the Australian stock market. Once this gets broken, the markets will see a low, which, in many cases, would be higher than its previous low.

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Category: Finances
Keywords: Fiscal cliff, RBA, ASX