The continuous high of S&P/ASX 200 is spreading a contagious bullish attitude among local traders. New research from global financial technology company IG released finds that although traders in Australia continue to favour commodities and indices, they are actively exploring other financial markets under improving conditions.
The ‘A Trader’s Position’ Report – informed by IG’s biannual Client Sentiment Survey – notes that 65% of Australian traders believe the ASX 200 will rise in the next six months, the most bullish attitude since January 2022. One-third (31%) of Australian traders anticipate the energy sector will experience the highest growth over the next six months and one-quarter also saw similar promise in the semiconductor equipment sector, despite potential geopolitical competition between the US and China over Taiwan’s industry continuing to bubble in the background.
Head of Australia for IG, Matthew Davidson, said “As you’d expect, we are seeing more IG clients globally allocating to cash, as we come off tight economic conditions. However, traders are also prioritising lower-risk financial markets. Almost a third of IG clients (31%) traded commodities through our leveraged product in the last half of 2023, up from 18% the same time last year.
“At home, Australian traders have shifted their trading strategies more to international markets – almost doubling their focus on the US in the last six months. In December 2023, 21% of IG clients said they had increased their focus on international markets, vs 13% in June 2023. This indicates traders are identifying greater opportunities outside of Australia where the market volatility and profit window might differ.”
The research also reveals an early stage turn by Australian traders looking to take advantage of the rise of AI, with 12% of Australian traders indicating they were using the technology to assist with trading and investment decisions, to analyse information and to define terminology. Despite the increasing interest, Australia is lagging behind on AI uptake amongst other global markets, with 16% of IG’s German clients indicating AI usage, followed by Japan (13%) and Singapore (13%).
However, Australians are out in front on the use of other digital tools, with close to a third having drawn on video content (35%) and podcasts (32%) as an educational source. The latter tallies with the findings of the 2023 Infinite Dial Australia report, which showed Australia is becoming a ubiquitous market for podcast listening.
Davidson reflected on the report findings which mirror the nature of IG’s traders particularly in the current political and economic climate.
“We can see Australian traders are becoming nimbler and more open to exploration. They are actively upskilling not only in the technicalities of trading, but also in analysing world events and interpreting market triggers. We continue to see engaged, sophisticated traders manage a fine balance between being bullish about market outlook, and maintaining an established trading strategy that is sustainable in the long term.”
“The valuable insights gathered through our biannual Client Sentiment Survey and reflected in A Trader’s Position are critical for identifying the areas we can continue to extend and enhance our clients’ trading experience. They also allow us to map specific trends over extended periods to provide elevated market insights to industry.”
The Sentiment – a source of news and opinion shaping public sentiment on ASX-listed companies.
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