Share Market Wrap 4th Aug 06

It is interesting how financial commentators always take a microscopic view of the market. The announcement of a rise in interest rates this week was no surprise, yet many are claiming that the fall in the share market on Wednesday was as a result of this announcement. However, the fall on Wednesday was no greater than what we have experienced in any one day over the past six weeks, so how they claim that the interest rate rise actually affected the market. More importantly, what difference does it make to the medium to long term outlook of the share market? Smart investors and traders don’t buy or sell based on what occurs in the market on a daily basis or what happens in the economy, rather they make decisions based on solid facts about the company they are analysing.

As expected, the market has remained volatile over the last week but it is now starting to settle, so we should see it rise over the next few weeks although I doubt we will see any major gains, instead I expect it to rise steadily. In line with this, I expect to see a number of stocks that have been trading sideways and down find support and start to rise again.