Domestically, the S&P/ASX 200 Accumulation Index was up 2.26% during the period. Information Technology (+13.4%) was the best performing sector. The market moves reflected the view that recent inflation outcomes could be transitory, meaning lower rates for longer and therefore positive for duration stocks. Communications (+5.6%) also outperformed, with the Telco’s lifting the sector on favourable industry dynamics. Financials (-0.2%) was the worst performing sector, in a direct reversal of the pro-cyclical trade last month. Materials (+0.3%) similarly suffered from the shift towards lower inflation, lower growth sentiment.

Internationally, markets had mixed performance during the month. US markets led during the period (S&P 500 +2.2%, NASDAQ +5.6%), as technology companies rallied with the duration trade. Korean markets (KOSPI +2.9%) similarly benefitted from the thematic. Europe (MSCI Europe ex-UK +1.8%) and the UK (FTSE 100 +0.2%) continued their economic recovery, as the vaccine drive picks up pace. The remaining Asian bourses (CSI 300 +0.0, Nikkei 225 -0.2%, Hang Seng -1.1%) were more subdued, with virus flare-ups causing anxiety in the markets. Initial success at containing the virus has been threatened by lacklustre vaccination programs, prolonging the recovery period.

Disclaimer
This document has been prepared by DNR Capital Pty Ltd, AFS Representative – 294844 of DNR AFSL Pty Ltd ABN 39 118 946 400, AFSL 301658. It is general information only and is not intended to be a recommendation to invest in any product or financial service mentioned above. Whilst DNR Capital has used its best endeavours to ensure the information within this document is accurate it cannot be relied upon in any way and recipients must make their own enquiries concerning the accuracy of the information within. The general information in this document has been prepared without reference to any recipient’s objectives, financial situation or needs. Before making any financial investment decisions we recommend recipients obtain legal and taxation advice appropriate to their particular needs. Investment in a DNR Capital managed account can only be made on completion of all the required documentation.

Source: Motor Trader e-Magazine (July 2021)

8 July 2021