Shares plumbed a 10-month low this morning but pared losses alongside Asian markets despite US futures pointing to a soft start to tonight's session.
At lunchtime the ASX 200 was flat at 4473 after earlier hitting its lowest level since September 2010. Consumer and energy stocks were the biggest drags as News Corp slumped nearly 7% and Woodside Petroleum marked a 12-month low. Resource stocks and small caps resisted the market trend, rising 0.5% and 0.4%, respectively.
US futures flashed red as traders continued to fret about a political deadlock over the federal debt ceiling. Dow futures were recently down 55 points or 0.4% but trading above earlier lows.
"There's a big lump of debt involved. There's a possible downgrade by the ratings agencies, so really they have got to bang their heads together and do something," Bell Potter senior adviser Stuart Smith told Fairfax.
Asian markets turned higher. Shanghai was recently up 0.11% and Hong Kong's Hang Seng ahead 0.48%. Japan's Nikkei was closed for a public holiday.
A sharp rise in the US dollar cut nearly a quarter of a cent from the Aussie dollar this morning. The US dollar index rallied 0.42%. The Aussie was recently buying US $1.0613.
Crude oil futures gave up early gains to trade recently 2 cents weaker at US $97.23 a barrel. Spot gold was 30 cents weaker at US $1,593.80 an ounce.
US futures look ominous but it's very early days. Hong Kong is strong but Shanghai can't make up its mind. I spent the morning rummaging through the bargain bins. Bought a very flea-bitten media company in NWS - no idea yet if it represents value but it's certainly coming off its low. Also had dabbles in JBH and AUN. CEO obviously steadied - will watch the close with a view to a possible overnight hold.
