"Yes Australia's currency and its stock market have had a good time... [but] there isn't a strong macro story for Australia at this juncture," said Vasu Menon, vice president of wealth management at OCBC bank.
Sentiment surrounding the Australian economy has turned markedly bearish this year amid speculation of a peak in the country's mining sector, slowing demand from major trading partner China and ongoing political uncertainty.
However, more positive economic data out of China in recent weeks coupled with the euphoria of a new Liberal National coalition government have started to fuel hopes that the economy could be getting back on track, leading to gains for the domestic stock market.
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But OCBC's Menon, who remains unconvinced about the stabilization of China's economy, thinks Australia is on course for more pain.
"Despite the recent [positive] data [out of China] you have to put into perspective the economic picture in China. It's slowed down significantly from two to three years [ago]," he said.
"The new government appears intent on ensuring greater social equality, that corruption is weeded out, and that the banking system is strengthened. I think that means slowing growth for China in the coming quarters and a slower China might not be the best piece of news for Australia," he added.
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Other analysts were also concerned that investors might be underestimating the extent of China's slowdown.