Shares started the week on the back foot as weaker commodity prices and the launch of a Royal Commission into finance overshadowed positive signals from the US.
The ASX 200 declined 21 points or 0.4% to 5817 despite a rebound session on Wall Street on Friday and upbeat US equity futures this morning. S&P 500 futures were lately up 13.5 points or 0.52%, raising hopes that Friday's swing session marked a turning point after a week of extreme volatility on world markets. The S&P 500 hit a four-month low on Friday before reversing to a closing gain of 1.49%.
Australian buyers proved reluctant to add risk this morning in the face of domestic headwinds. Commodity prices including iron ore, crude and base metals lost ground on Friday. This morning marked the first official pronouncements from the Banking Royal Commission, due to start in earnest next month. Read more here. The financial sector retreated 0.7% after the Commissioner outlined some of the topics to be explored. Utilities lost 1.7%, telecoms 1.4%, energy 1% and gold 1.2%.
Asian markets edged higher. China's Shanghai Composite added 0.3% and Hong Kong's Hang Seng 0.36%. Trade on Japan's Nikkei was suspended for a public holiday.
Crude oil futures rebounded 57 cents or 0.96% to US$59.77 a barrel. Gold futures rose $9.90 or 0.75% to US$1,325.70 an ounce. The dollar was buying 78.24 US cents.
Promising signs from overseas, but Australia aint buying yet. Yield stocks are under pressure from sector rotation. The utilities sector marked its lowest point today since December 2016. However, if Wall Street rallies tonight we're surely a lock to follow suit tomorrow. There were also big jumps in crude and gold this morning and hopeful signs in Specland that traders are willing to forgive last week as a temporary aberration. Good to see a few runners this morning. Thought it might take more time for the market to absorb the shock. Trading: just one hit. Caught a partfill in PSC at the low.
