Market update - June 2012
Australian investors are getting used to the domestic equity market underperforming its global counterparts, even though we continue to be assured we’re doing a better job of weathering the ongoing global market volatility.
This is why June’s lacklustre domestic market results might come as no great surprise. The ASX200 Accumulation Index limped over the line up a paltry 0.66% in June. For the financial year 2011/12, while the US share market rose 3.1%, the ASX200 capped off a poor year with a decline of 6.71%.
In fact, June saw many global indexes post positive returns. After much anticipation, the Greek elections in mid-June were a bit of a non-event with markets barely moving on the outcome. However a somewhat surprisingly large influence on market sentiment was provided by a positive statement out of the Euro Summit towards the end of June, which saw equity markets rally into month end. The Euro-stoxx led the way with a positive 6.9%, whilst in the US, the S&P 500 returned 4.0%. Asian markets also were positive with the Japanese Nikkei returning 5.4%, and Hong Kong’s Hang Seng up 4.4%.
The small positive garnered by the Australian share market was driven mainly by high yield, defensive stocks in sectors such as Industrials, Financials and Property Trusts. The largest component in the Australian market – Resources – was the worst hit, helping to explain the market’s negative return for the month.
The Australian dollar faced two negatives in June with the Reserve Bank of Australia cutting again to leave the cash rate at 3.5% and commodity prices falling. However the Australian dollar still rallied 5.2% against a generally weaker USD.
Fixed interest markets were slightly negative for the month, as investors took profits after a very strong April and May.
Want to find out more?
For a more detailed analysis of:
- domestic and global market performance in June 2012
- how our funds performed, and
- what our outlook is for the period ahead