Commsec sees brighter days ahead for Australian stocks

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Despite some late stimulus-inspired heroics, Australian stocks had a tough 2016 financial year.

The benchmark ASX 200 index slid 4.1%, making it the significant underachiever compared to government bonds and housing which recorded solid gains of 7.9% and 13.9% respectively.

Including dividends, the news was a little better, with the All Ordinaries accumulation index managing to eke out a tiny 2% gain.

Thanks to Craig James and Savanth Sebastian, Commsec’s economics team, the nifty table below shows how each individual industry group performed over the year.

It also explains why the benchmark index ended up in the red, with some of the big boppers — financials, materials, energy and telecommunications — all posting declines of more than 5.9%.

So what can investors expect in the FY 2017?

James and Savanth believe that there are better times ahead, something that the vast majority of investors will be hoping for.

“Commsec expects the All Ordinaries index to be near 5,500-5,700 points at end-December 2016 and 5,700-5,900 points in June 2017,” they say.

That would equate to gains of 7-10.7% from its current trading level of 5,330 over the next 12 months.

They could well be right, but it’d be a punchy increase nonetheless. Such is the general optimism of those operating in the outer reaches of the risk asset spectrum.

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