The share market is flirting with a third straight losing week after profit warnings from Origin Energy and Emeco added to pressure from overseas falls and stocks trading ex-dividend.
At lunchtime the ASX 200 was 25 points or 0.6% softer at 4458 but well above the morning low of 4436. Financials -1.2% were the biggest drag on the market as NAB and WBC traded without their dividends. Energy stocks fell 0.9% after Origin warned it will miss its current profit target by as much as 10%. The declines followed another negative session on Wall Street overnight.
"Investors have just gotten nervous," Shane Oliver, head of investment strategy at AMP, told Bloomberg. "You've got residual concern about the US fiscal cliff and this delay in payments to Greece. The worries were there before. It sounds a bit irrational, but that's the way markets often work. Once they start going down, the falling momentum triggers more selling."
The dollar retreated after the Reserve Bank downgraded its growth outlook for next year. The central bank's quarterly monetary policy statement revised the GDP forecast for 2013 to 3% from 3.75% this year, citing deteriorating investment in mining due to soft commodity prices. The dollar was recently buying $US1.0403 as forex traders bet that the downbeat outlook increased the prospects of a cut to the cash rate next month.
Asian markets eased following a slowdown in Chinese inflation that left the authorities plenty of room for further monetary easing. Consumer inflation eased to 1.7% from 1.9% the previous month and producer prices were 2.8% weaker than a year ago. Shanghai fell 0.02%, Hong Kong's Hang Seng 0.48% and Japan's Nikkei 0.95%. Dow futures were recently up 29 points or 0.2%.
Crude oil futures rallied 29 cents this morning to US$85.27 a barrel. Spot gold was $2.10 stronger at US$1,735.10 an ounce.
Some nice long-tailed candles forming at around this level on the XJO, suggesting support. The bulls are fighting a stiff rearguard action here in Australia. So much so that as others noted here, there weren't many easy picks in the opening dump. Thank goodness for SIR, the trader's friend, which offered a nice bounce. I bailed far too early and then repeated the error in MZI. Also flipped PDZ for a couple of pips. If my exits were half as good as my entries...
