The global macro environment continued to improve during February with the ECB’s LTRO program increasing liquidity and reducing near term concerns around the European financial system.
Resilient US macro prints and data suggesting a soft landing in China (RRR reduced by 50 bp) saw investors continue to increase risk across portfolios with equities a beneficiary. A strengthening oil price driven by supply constraints is becoming an increasing focus and concern for investors.
The Australian equity market (ASX200) finished February flat (+0.8%) with Banks and Resources both underperforming. Reporting season was a key focus with margins across the industrials and banks remaining under pressure. Mining services reported solid growth while retail and media struggled. Increasing M&A activity across deep value stocks saw renewed interest in this segment.
Download the Wrap Up of the Market for February 2012 here.