The view from Down Under: Seeing some positive signs at home and abroad

Australian markets are up as the global economic pendulum gradually moves into positive territory.

Peter Warnes 20 August, 2013 | 5:47AM

The Australian stock market is marching toward the 2013 high of 14 May when the All Ordinaries was at 5,202.5 and the S&P/ASX200 at 5,221.0. As the second week of the 2012/13 reporting season closes there have been no significant negative surprises. (In Australia, the fiscal year starts on July 1 and ends on June 30.) August and September are traditionally weaker months for the stock market. What is behind the newfound confidence, given the rather dire economic outlook suggested by several bodies including the Reserve Bank of Australia and the International Monetary Fund and a raft of economists and commentators?

Global economy looking better

Perhaps most of the negatives were already accounted for in stock prices, and any semblance of positive news attracts buyers. From a global economic perspective one could argue the pendulum is gradually moving into positive territory.

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Peter Warnes

Peter Warnes  Peter Warnes is the head of equity research for Morningstar.

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