Australian shares set a new four-and-a-half-year high this morning before easing after new data showed business conditions and confidence deteriorated last month.
At lunchtime the ASX 200 was four points or 0.1% weaker at 5142 as gains in the big banks and property trusts were overshadowed by falls among mining stocks and industrials. The financials sector gained 0.6%, IT 0.2% and property trusts +0.2%. Notable declines included utilities -1.5%, gold -1.5%, energy -1.2%, metals & mining -0.8% and the Small Ordinaries -0.7%.
"It looks as if it's an echo of US trading overnight where the finance sector was the best performing sector," Michael McCarthy, chief market strategist at CMC Markets, told Fairfax.
The market was hovering near break-even before the 11.30am EST release of data that showed business conditions eased last month. NAB's monthly conditions index declined to -3 from -2 and the confidence index to +1 from +3 in January
"Perhaps most concerning is the slump in forward orders, with the index declining to its lowest level since May 2009," NAB chief economist Alan Oster told Fairfax. "Combined with still low capacity utilisation, stocks and employment and capital expenditure readings, forward indicators imply little improvement in near-term demand."
Japanese shares were on track for their ninth straight rise, the Nikkei's best run in nearly three years. The index was lately up 0.53% as traders continued to bet on future monetary easing. Shanghai put on 0.23% and Hong Kong's Hang Seng 0.18%. Dow futures were recently unchanged at 14,444.
Crude oil futures rallied 31 cents this morning to US$92.14 a barrel. Spot gold was $1.90 stronger at US$1,581.70 an ounce. The dollar was buying $US1.0293.
But for the banks the index would be some distance lower this morning. Been quite a bit of profit-taking in the mid-caps, creating fleeting bounce opportunities. I took a few pips off PRY, APA and CWN. MEU also offered a couple of entries. All in all, a good morning, even if I was dumb enough to dismiss the potential in CFU on the basis of a headline. "State subsidy"? Yawn. Memo to self: next time read the full announcement.
