Investor update
You should always consult your Bridges financial planner before taking action on any recommendation given.
Information current as at 31 October 2011
Equities rallied in October as investors grew more confident that arrangements struck at a European leaders’ summit towards the end of the month could defuse the euro sovereign crisis. The ASX200 chalked up its seventh best month (+7.2%, +7.2% accumulation) since the index began in 1992. This made it a moderate performer in global terms, although the currency (Australian Dollar (AUD) +9.0% vs US Dollar (USD) rebounded from its September losses. The S&P500 (+10.8%) had its best month since December 1991 as firmer economic indicators added to euro optimism. Both Europe (Euro Stoxx 50 +9.4%, FTSE100 +8.1%) and Asia (MSCI APEX 50 +11.8%) were strong, though Tokyo lagged (Nikkei 225 +3.3%). The Aussie market's two big sectors both outperformed: Banks (+10.7%) reflected easing credit spreads while Resources (+9.2%) benefited from stronger sentiment on world growth
Australian Shares
Equities rallied in October as investors grew more confident that arrangements struck at a European leaders’ summit towards the end of the month could defuse the euro sovereign crisis. The ASX200 chalked up its seventh best month (+7.2%, +7.2% accumulation) since the index began in 1992. This made it a moderate performer in global terms, although the currency (Australian Dollar (AUD) +9.0% vs US Dollar (USD) rebounded from its September losses. The S&P500 (+10.8%) had its best month since December 1991 as firmer economic indicators added to euro optimism. Both Europe (Euro Stoxx 50 +9.4%, FTSE100 +8.1%) and Asia (MSCI APEX 50 +11.8%) were strong, though Tokyo lagged (Nikkei 225 +3.3%). The Aussie market's two big sectors both outperformed: Banks (+10.7%) reflected easing credit spreads while Resources (+9.2%) benefited from stronger sentiment on world growth.
Economic news
Eurozone leaders unveiled a new initiative to tackle sovereign debt stress. It involved a 50% ‘haircut’ for private-sector holders of Greek government bonds, a target €106bn recapitalisation of the region’s banks and an intention to expand the firepower of the €440bbn fund created in July. The package was well received by markets, although Italian bond yields remained high. Local economic news supported expectations of Reserve Bank easing; third quarter (3Q) was lower than expected and RBA commentary appeared to moderate concerns on inflationary pressures. Commodity prices were mostly firmer, a notable exception being spot iron ore which returned to levels last seen in late 2009.
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