The Australian market might appear to be volatile at the moment but overall local stocks gained 5.8% in value in the short month of February.
The market has returned to bigger ups and downs but the upward momentum is firm.
Since the start of calendar 2015, the ASX 200 is up 9%. That’s almost twice as much as for the entire 2014.
It also helps that Wall Street, ever the indicator for the direction of the Australian market, had a stellar month in February with the S&P 500 up 5.5%.
The market is now looking at whether the ASX 200 can break through 6000 points; there’s about 70 points to go for something not seen since before the GFC.
In Australia, investors were generally cheered by better than expected half-year earning results from listed companies announced in February.
Overall profit results have been better than usual, with 55% of companies beating expectations against a norm of 45%.
And 66% of companies have seen profits rise from a year ago. More than half (52%) saw their share price outperform the day results were released and 62% have increased dividends.
Shane Oliver, chief economist at AMP Capital, says key themes have been ongoing tough times for resources and mining services companies, reasonable growth for the rest of the market helped by ongoing cost control, and solid growth in dividends.
Earnings expectations for the current financial year are little changed.
“Sure resources profits are falling around 20%, but this is a bit less negative than earlier expected,” Oliver says. “Meanwhile, banks are seeing profit growth around 8% and industrials around 10%.”
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