Markets Update - General
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Commodities drive Australian share market higher
The S&P/ASX 300 Accumulation index rose 3.6% in January. The best performing stocks had exposure to surging commodity prices. These included: CSR (Sugar, +21.8%), Oxiana (Copper & Gold, +16.1%), Woodside (Oil, +15.4%), Zinifex (Zinc, +14.1%) and BHP Billiton (Diversified Metals & Minerals, +13.4%).
International equities continue strong performance despite currency impacts
International equities continued their strong performance in January with the MSCI World Ex Australia (net div in $A unhedged) returning 1.2%. The best performing markets were France (CAC: +4.9%), Germany (DAX: +4.9%) and Japan (Nikkei 225: +3.3%). The hedged benchmark returned 3.3%, as the Australian dollar rallied against the US Dollar (+3.1%), Japanese Yen (+2.3%) and the Euro (+0.2%).
Fixed interest markets deliver flat returns as yields rally
The Australian UBS All Maturities Composite Bond Index returned 0.2% for the month to 31 January 2006. The international Lehman Global Aggregate Index returned 0.0% for the month. The best performing sector in both international and domestic bonds were corporate issues.
Australian listed property declines on concerns over valuations
The S&P/ASX 300 Property Trust Accumulation Index returned -1.2% in January underperforming the broader Australian equity market, by 4.8%. For the year to 31 January 2006, the index had underperformed the broader equity market by 14.4%. Given the substantial run in listed property over the last few years’ valuations have become less compelling than other asset classes.
