A partial rebound on Wall Street overnight failed to stop a third day of selling on the ASX and the prospect of the market's lowest close in eight weeks.
At 1pm EST the ASX 200 was down 10 points or 0.2% at 5728 as the financial sector slid more than 1% to its lowest point since early February before paring its loss to 0.7%. A close around these levels would be the overall market's weakest finish since late March. Also under pressure were gold stocks -1.9%, consumer staples -0.7% and industrials -0.6%. Cushioning the fall were gains in metals & mining+1.3% and materials +1.1%.
“While investors will be relieved that yesterday’s selling looks unlikely to be repeated today, it’s too early to assume yesterday was a one-day wonder,” Ric Spooner, market strategist at CMC Markets, told Bloomberg. “Markets have clearly decided that the US political situation has the potential to knock stock valuations off their relatively high perch.”
A low-key session in Asia left key markets little changed. China's Shanghai Composite flatlined, Hong Kong's Hang Seng gained 0.21% and Japan's Nikkei gave up 0.16%. Dow futures were recently down 13 points or 0.06%.
Crude oil futures rallied 38 cents or 0.77% this morning to US$49.73 a barrel. Gold futures declined $3.30 or 0.26% to US$1,249.50 an ounce. The dollar was buying 74.21 US cents.
Australian traders appear unconvinced last night's tepid Wall Street rally was anything more than a dead cat bounce. Time will tell. The mood at the spec end remains fairly downbeat. I've been tinkering with AVZ and VRC without much conviction.
