A third day of falls among the big banks steered the ASX 200 to a new 10-week low this morning amid further weakness in Asian shares and US futures.
At lunchtime the benchmark index was off 30 points or 0.7% at 4598 after earlier falling as low as 4585. The financial and industrial sectors were the biggest weights on the market, falling 1.3% and 0.9%, respectively. Resource stocks were moderately weaker at -0.3% following overnight gains in commodities.
"We're not seeing huge amounts of really aggressive selling. It's just the fact there's really a buyer's strike," IG Markets analyst Ben Potter told Fairfax. "People are just sitting back and thinking they will get better opportunities to buy this market over the next 6-8 weeks and see no catalyst to buy at the moment. They don't see any hurry in buying until later, end of July or August."
US futures sagged with Asian markets this morning. Japan's Nikkei finished the morning session 0.36% weaker after the trade balance slumped to a deficit last month as the after-effects of the March 11 earthquake and tsunami disrupted exports. Shanghai pared early losses to trade recently at -0.22% and Hong Kong's Hang Seng fell 0.57%. Dow futures were recently at -73 or -0.6%.
In domestic economic news, the odds on a June interest rate rise fell after construction work picked up less than expected during the first quarter. Construction work lifted by 0.7% over the three months to March, according to ABS figures released this morning, half the 1.5% rise tipped by economists. The dollar fell and analysts lowered their expectations for next Wednesday's GDP figures following the news. The dollar was recently buying US $1.0503, down around half a cent.
"We think the RBA will sit on the sidelines until August, when it will have the second quarter CPI data in hand," JP Morgan economist Helen Kevans told Fairfax.
Crude oil futures eased 54 cents this morning to US $98.86 a barrel. Spot gold was $2.70 weaker at US $1,524.20 an ounce.
Gotta love mornings like these, where a sharp initial fall offers reasonably safe entries for any afternoon recoveries. Yesterday's market action was a clue that there is buying interest once prices fall far enough. GNC was a gift when it reached support - yesterday's candle was a clue that the big money was running it down and then back up. PXS had enough volatility for a couple of trades. I also bought lows in AIX, BXB, OEX and CNX. Turning into a very nice morning to make up for a slow start to the week.
