Daytrading August 31 afternoon

Thanks Brit and morning regulars.


Half-time round-up:

The share market's four-session winning run is under pressure after US equity futures reacted negatively to weekend indications a September rate hike is still possible and reports that the Chinese government has backed away from direct intervention in the market.

At 1pm EST the ASX 200 was trading 63 points or 1.2% lower at 5200 after earlier dropping as low as 5185. Consumer staples was the biggest weight on the market, falling 2.7% as WOW came under selling pressure following a credit downgrade from Moody's. Financials -1.5%, energy -1.2% and utilities -1.1% were the morning's other major losers. The gold sector bucked the downtrend with a rise of 0.8%.

Dow futures were lately down 190 points or 1.1% after US Federal Reserve vice chairman Stanley Fischer insisted that the central bank can start to raise lending rates from record lows before inflation reaches the Fed's target of 2%. Also unsettling Asian markets were disappointing Japanese industrial production data and reports that the Chinese government has abandoned attempts to prop the Shanghai Composite through state-funded buying. The Shanghai Composite was lately down 3.01%, Hong Kong's Hang Seng 0.66% and Japan's Nikkei 1.06%.

“We are going to continue to see volatility,” Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors, told Bloomberg. “The Fed is aware of the market volatility and you wouldn’t have thought they would be raising rates into market turmoil. But at the same time, data coming out of the US has been surprisingly resilient and strong. It’s very difficult for the Fed.”

Crude oil futures cents reversed 74 cents or 1.6% this morning to US$44.50 a barrel. Spot gold was $1.10 higher at US$1,134.90 an ounce. The dollar was buying 71.38 US cents.


Clearly a 'risk-off' morning. Too many converging negatives following hints on Friday that this relief rally might be topping out in the short term. There is Chinese factory data to look forward to tomorrow and it's hard to be optimistic about that. Trading: been scratchy for the last three sessions. Got something out of 3DM. Took IFM on basis the fall looks overdone relative to the dividend, but no joy there yet.