daytrading june 4 afternoon

Thanks Endless.

Half-time round-up:

Australia's benchmark share index this morning slumped below 4000 for the first time since late November as weak domestic economic data compounded soft US futures and sharp falls across Asia.

At lunchtime the ASX 200 was down 65 points or 1.6% at 3998 after touching a low of 3988. This morning's fall extended the index's decline since May 1 to more than 10% and into a technical correction.

All sectors declined except gold stocks +3.7% and telecoms +0.2%. The falls were heaviest among cyclical sectors including energy -2.9%, the Small Ords -2.4%, industrials -2.1% and consumer discretionary -2.3%.

"Investors are just fleeing risk assets," ATI Asset Management chief investment officer Simon Burge told Fairfax. "Bond yields are at an all-time low. Even in the global financial crisis we didn't see bond yields at the levels that they have reached now... This is a flight from risk assets that is unprecedented."

Asian markets skidded as US futures pointed to further falls tonight. Japan's Nikkei fell 2%, Shanghai 1.2% and Hong Kong's Hang Seng 2.29%. Dow futures were recently off 75 points or 0.6%.

A majority of economists polled by Bloomberg were tipping another cut to the cash rate at tomorrow's Reserve Bank meeting after another round of weak data this morning. The job ads index fell 2.4% last month, company operating profits dropped 4% over the first quarter and inflation hit zero last month for an annual rate of 1.8% - below the RBA's 2-3% target band.

Crude oil futures plunged another 82 cents this morning to US$82.44 a barrel. Spot gold was $11.10 softer at US$1,616.70 an ounce. The dollar was buying 96.6 US cents.


The merest hint of a bounce on the XJO in the last hour, perhaps because of this: Germany may be open to euro-zone bonds: WSJ. Otherwise it has been a bleak morning. It was particularly disturbing to see how weak the volume is on some mid-caps considering the size of the falls. I've been buying lows but if this morning has taught me anything it's that picking a low is one skill, finding a decent bounce is another. Skinny profits squeezed out of CSE, SWM, CCC and WHC. Still holding RUM.