Rumours of a bank levy in tonight's budget combined with soft retail data to help push the ASX into the red this morning.
At 1pm EST the ASX 200 was 16 points or 0.3% lower at 5854, reversing much of yesterday's gains as the financials sector slumped 1.7% to a six-week low following a report that the government is considering a levy on institutional bank loans. Read more here.
"However [the levy] is described it will represent an additional tax or fee and the market is likely to be nervous about this prospect until they get details of what might be involved and what capacity of banks might have to pass this cost on to customers," CMC chief market analyst Ric Spooner told Fairfax.
CBA led the rout, falling 2.8% after an underwhelming quarterly trading update. The index decline was cushioned by gains in energy stock +1.4%, IT +1.4% and telecoms +1.5%. The consumer discretionary sector lost 0.1% following news that retail sales declined by 0.1% during March, defying expectations for a 0.3% rebound. The revised annual sales growth rate of 0.3% was the weakest in five years.
A flat night on Wall Street overnight left most Asian markets little changed. Hong Kong's Hang Seng edged up 0.17%. while Japan's Nikkei dipped 0.08% and China's Shanghai Composite 0.16%. Dow futures were recently up one point or 0.01%.
Crude oil futures edged down two cents or 0.04% this morning to US$46.41 a barrel. Gold futures gained $1 or 0.08% to US$1,228.10 an ounce. The dollar was buying 73.64 US cents.
If there's one thing the market does not like, it's government interference in profit-making. The XJO would be ahead today if not for the bank panic. Be interesting to see what is announced tonight. Trading: a better day within a tough few weeks. Conditions lately have been limp. Took a slim profit on CL8 from yesterday. SRZ was a cracker - best win in some time. Took CTL on the same principle, and it's slowly coming good.
