The market continues to struggle with two major contributors at present. First is the pending vote on the UK leaving the EU. This issue here is that we do not really know what the fall out will be if there is a YES vote. Will other countries follow, if so this would typically be the strong ones which are currently being held back due to the EU structure.
With this uncertainty we are seeing a flight to safety as money is moving out of European currencies into distant havens such as the yen and dollar. This is pushing the London markets down having an effect on our and other markets around the world. Investors are currently sitting on the side line until it is clear how this will all play out.
The second issue is back in Australia with the election heating up, there is always uncertainty around the economy during an election and this one is no different. Investors are again have no clear vision as to who might win and if government will function better after the election. Again we see investors sitting on the side lines for now.
Our market wiped off around 4% this week before rebounding a little towards the end of the week. We are back in the long term trading range between 5100 and 5400 I expect we will remain here until the election is over and the dust settles.
This has however provided an opportunity to pick up a few more quality companies cheaper.