Australian shares dropped for a third day as a poorly-received profit report from ANZ and the threat of bribery charges against BHP compounded overnight weakness on Wall Street.
At lunchtime the ASX 200 was 46 points or 0.9% in the red at 5106 but on track to close higher for the week following strong gains on Monday and Tuesday. A 3% slump in ANZ shares following news of a squeeze on interest margins helped steer the financials sector down 1.2%. The metals & mining sector fell 1.4% after BHP was warned it may face charges in the US resulting from a long-running Securities and Exchange Commission investigation. Read more here. Gold +4%, energy +0.7% and utilities +0.3% were the only sectors to resist the downdraught after Federal Reserve "taper" fears fuelled Wall Street's worst night since June.
"The market seems... pretty convinced there will be tapering next month," Chris Green, a strategist at First NZ Capital, told Bloomberg. "The market needs to digest the idea in part that tapering is a fundamentally good sign as it comes with the backdrop of an improving US economy."
Asian markets joined the global retreat. Shanghai lost 0.71%, Hong Kong's Hang Seng 0.77% and Japan's Nikkei 1.29%. Dow futures were up one point or less than 0.1%.
Crude oil futures gave back seven cents this morning at US$107.19 a barrel. Spot gold rallied another $2.60 to US$1,367.70 an ounce. The dollar was buying 91.51 US cents.
Good to see the specs still partying like it's Tuesday. Always the last sector to notice a downturn. That's handy because it gives traders extra time to ease out of existing positions, but also means the falls tend to be more dramatic when they come. Of course, that's assuming this is the start of a genuine retrace, rather than a mere blip in the up-trend. Time will tell. Meantime, volatility creates opportunity. I had wins this morning in CTP and MNE. Also took ARI, RHC and IAG for any afternoon recoveries.
