The share market slumped to a seven-week low this morning as the Nikkei resumed its downward spiral and soft business spending offset a surge in building approvals.
At lunchtime the ASX 200 was 64 points or 1.3% lower at 4910 after earlier dipping below 4900 for the first time since April 8. The sell-off spared no sector except gold, which rallied 1.1% as the metal once again neared the US$1,400 level. Spot gold was lately ahead $2.10 for the morning at US$1,394.90 an ounce.
Yield stocks continued to come under the pump. Telecoms fell 2.6%, property trusts 2.2%, financials 1.3% and utilities 1%. Elsewhere, the metals & mining sector lost 1.7%.
A mixed serve of economic news saw a dramatic drop in private capital expenditure and strength in building approvals. Private capital expenditure sagged 4.7% over the first quarter of the year, dashing economists' expectations for an improvement of around 0.5%. Building approvals increased by a seasonally-adjusted 9.1% last month, extending a 5.5% rise in March. The dollar initially slumped as the data was released, but quickly recovered to 96.54 US cents.
Japanese shares suffered another substantial tumble after overnight strength in the yen hurt exporters. The Nikkei was lately down 2.8%. Shanghai dipped 0.02% and Hong Kong's Hang Seng lost 0.09%. Dow futures were recently up six points or less than 0.1%.
Crude oil futures rallied 29 cents this morning to US$93.17 a barrel.
An ugly morning leaves the XJO drinking in the last-chance saloon, so far as the short-term outlook is concerned. If it doesn't hold 4900, it could drop another couple of hundred points. Odd, then, that the specs are offering a few runners this week. Didn't they get the memo? The mid-caps continue to provide plenty of volatility and that's where I concentrated this morning's efforts. SXY was a beaut. LLC and GPT offered promising trading set-ups but only the former delivered any substantial profit. Missed a few more. Recently added BWP at support but the sector - and market as a whole - looks fragile today.
