Wall Street's sharpest setback in four months helped push the ASX into reverse this morning.
The benchmark Australian index, the ASX 200, fell 32 points or 0.5% to 6043, giving back roughly half its gains over the previous four sessions. A broad retreat left no sector unscathed. Hardest hit were energy stocks -1.2%, gold -1.2% and metals & mining -1%. Telecoms was the best of a sorry bunch with a loss of 0.1%.
There were signs overnight that volatility in the US may be picking up, with Friday's big advance - the strongest in 11 months - followed by the largest retreat since September. The S&P 500 and Dow both shed 0.67% as bond yields hit a three-and-a-half-year high. Analysts said the rise in yields reflects expectations that rates and inflation will increase as the global economy gathers pace.
“This is a rise in real interest rates, also reflecting a rise in inflation expectations. Therefore it is a benign yield rise,” Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Japan told Reuters. “The yield rise may have bumped off US stocks from highs, but a correction was due after their recent gains.”
S&P 500 futures were recently off two and a half points or 0.09%. China's Shanghai Composite lost 0.29%, Hong Kong's Hang Seng 0.34% and Japan's Nikkei 0.82%.
Crude oil futures declined 17 cents or 0.26% this morning to US$65.39 a barrel. Gold futures gave up $1.30 or 0.1% to US$1,343.80 an ounce. The dollar was buying 80.97 US cents.
Been a lacklustre week so far. The quarterlies - always a reality check - tend to have a dampening effect on Specland. Traders sit back and wait for the reaction. Be glad when this season is over and we can get back to buying hot air and blue sky thinking, lol. Trading: didn't like the tepid reaction to the PNN quarterly, so bailed early for peanuts. Got a wage from VIC at 1.7c.
