Shares have declined for the third session in four as a pick-up in China's manufacturing sector failed to offset weak overnight leads and soft domestic data.
At lunchtime the ASX 200 was down 26 points or 0.6% at 4272 as a sharp fall in commodity prices filtered through the resources sector. Gold stocks were hit hardest, falling 2.6%, followed by materials -1.5% and energy stocks -1.3%. A handful of defensive sectors eked out gains, including telecoms +0.5% and consumer staples +0.5%.
China's official manufacturing index, released at noon EST, showed a modest acceleration from a reading of 50.5 in January to 51 last month. The rise was roughly in line with economists' predictions.
Domestic economic news was less supportive, with building approvals increasing by less than expected in January and capital expenditure falling last quarter. The 0.9% increase in building approvals was less than half the rise economists anticipated. Private capex fell a seasonally-adjusted 0.3% during the December quarter, well short of a consensus target of +3.8%.
Asian markets were mixed. Japan's Nikkei advanced 0.6% and Shanghai added 0.07% but Hong Kong's Hang Seng lost 0.27%. Dow futures were recently off three points or less than 0.1%.
Gold pared heavy overnight losses this morning. Spot gold was recently at US$1,719.50 an ounce, a rise of $21.20 this morning. Crude oil futures rallied 33 cents to US$107.20 a barrel. The dollar was buying US$1.0755.
A good morning to buy the lows, even if the market hasn't really kicked on with the bounce. The Chinese figures at noon were solid but not exciting enough to put a rocket under the market. I picked up a few points in VMG, SAR and MML.
