Profit taking drives market lower

Profit taking drives market lower

There has been some profit taking in many stocks in the last week, as people have been coming back from their holidays. Mining stocks were hit particularly hard at the end of the week, but there has not been anything of great concern. Softness in lithium stocks may have been a response to expanding supply forecast, or just plain profit taking. The risks of operating in the DRC have escalated with recent tax changes, keeping the positive outlook for cobalt prices.

The strength of the Aussie dollar has been most noticeable this month, as the US$ has been nudging three year lows. This will claw back some of the profits of exporting mining stocks, such as the gold producers, but it will also be providing currency gains for US$ denominated investors in Australian stocks. The gold price itself has been a robust performer in recent weeks as well, but it is too early to say anything more than it is near the highs of recent trading ranges