Australia's index has reasons for strength

Published 6 months ago at 14 Mar 2022

Australia’s leading index has a number of factors going for it right now. Firstly, pro-growth policies should help support Australia’s largest trade partner, China. Secondly, Australia is geographically a long way from the Ukraine/Russia crisis, so the index should be reasonable well insulated from direct risk. Thirdly, the boost in commodity prices like Iron ore and coal prices supports Australia’s economy. So, will the ASX rise again on its strong seasonal pattern?

Over the last 25 years the ASX 200 has risen 20 times between March 15 and April 25. The percentage of winning trades has been 80% and the average gain has been 3.47%. Does this mean the ASX shares could be worth considering to buy again? However, one key risk to this outlook is if the Fed are very aggressive on hiking rates on Wednesday. That should weigh on global stocks more generally.


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