Shares gave back a fraction of yesterday's bumper gains as heightened tensions on the Korean peninsula held back US equity futures and a report showed growth in Chinese services activity tapered last month.
The ASX 200 declined seven points or 0.1% to 5777 at the halfway mark of a low-key session as last night's Independence Day holiday in the US crimped buying interest. A mixed morning saw gains in metals & mining +1.1%, telecoms +0.1% and consumer discretionary +0.2% outweighed by falls in health -0.8%, utilities -0.7% and financials -0.1%.
The ASX enjoyed its best day of the year yesterday ahead of a US market holiday overnight. However, Dow futures turned negative after North Korea tested an intercontinental ballistic missile, recently off 10 points or 0.05%.
"Recent days have seen an unexpected sell-off followed by a violent rally, leaving traders more than usually uncertain about what today has in store for the ASX 200 index," CMC chief market analyst Ric Spooner told Fairfax. "Markets have a watching brief on global tensions following North Korea's missile test. However, there has been little evidence of support for safe haven assets at this stage."
China's Shanghai Composite gained 0.07% after a private gauge of services activity eased more than expected. Caixin's services purchasing managers' index dropped to 51.6 from 52.8. Although readings above 50 indicate expanding activity, economists had expected a minor retrace to around 52.6. Hong Kong's Hang Seng added 0.18% and Japan's Nikkei shed 0.52%.
Crude oil futures slid five cents or 0.11% this morning to US$47.02 a barrel. Gold futures picked up some haven buying, lately up $7.70 or 0.64% to US$1,227 an ounce. The dollar was buying 76.22 US cents.
Gold looks to be the big winner from the latest sabre-rattling on the Korean peninsula. Japan and South Korea are off a bit, but neither fall suggests panic. Been here too many times before. By the time Wall Street opens, the 24-hour news cycle will have moved on. Trading: nothing to report.
