Afternoon trading March 28

Thanks Oscar and morning crew.


Half-time round-up:

Shares fell for the fourth time in five sessions following a technology-led late sell-off on Wall Street.

The ASX 200 was down 33 points or 0.6% at 5799 at the halfway mark after retesting Monday's five-month closing low of 5790. Hardest hit were consumer discretionary stocks -1.2%, metals & mining -1% and IT -1%. The defensive utilities sector bucked the sinking tide with a rise of 1.9%.

A week of wild swings continued in the US overnight as the S&P 500 dived in the final hour to a loss of 1.72% as the tech sector was pummelled by fears of Chinese trade tariffs and Facebook copped another analyst downgrade. Futures trading this morning hinted at a possible recovery, with S&P 500 futures recently ahead 5.3 points or 0.2%.

Analysts attributed the late US plunge to a range of actors including end-of-month rebalancing, the looming Easter public holiday and questions over elevated valuations in the tech sector.

“Take the Facebook issue, take valuations, take the volatility we’ve seen in the market just alone in 2018, and telescope it into a few days at the end of a quarter in a holiday shortened week,” Ernie Cecilia, chief investment officer at Bryn Mawr Trust, told Bloomberg. “It just gets exacerbated. A lot of light got shown on valuations. These companies have done extraordinarily well from a stock price perspective, and the valuations are very rich.”

Asian markets followed Wall Street lower. China's Shanghai Composite gave up 0.74%, Hong Kong's Hang Seng 0.98% and Japan's Nikkei 1.8%.

Crude oil futures slid 33 cents or 0.51% this morning to US$64.92 a barrel. Gold futures edged up $3.70 or 0.27% to US$1,351.60 an ounce. The dollar was buying 76.95 US cents.



The bears appear to have seized control of international equity markets. Whereas last year markets rallied on slivers of good news, now the reverse holds true. Doesn't take much to trigger a sell-off. These big daily swings in the US are more characteristic of a twitchy bear market than a dull, healthy bull. The ASX topped out in the second week of January and has been in gentle decline since. The 5800 level has held well this week, but the trend suggests 5650/5700 is coming up in the weeks ahead. Unless, of course, things change. Trading: busy, profitable morning picking off the lows in WFE, AHF, ADR, POW and DCC. Sold most.