daytrade diaries... january 27 part 2

Half-time round-up:

Australian shares sank to their lowest level this year under a toxic mix of rate rise fears, a missed sales result from Woolworths and worries over the BHP/Rio iron ore venture.

At lunchtime the ASX 200 was down 74 points or 1.57% at 4643, with all sectors trading underwater. Worst hit were metals & mining, down 2.7%, materials -2.6%, gold -2.6% and energy -2.3%.

A glum morning of economic news included a worse-than-expected jump in inflation, increasing the prospects of an interest rate rise next week. The consumer price index rose 0.5% last quarter, against expectations of a 0.4% gain. "I think that means we will see another rate hike at the RBA's meeting next week," ICAP economist Adam Carr told Fairfax.

The big miners were hit hard after the European Commission opened a formal anti-trust investigation into Rio and BHPs plan to share iron ore assets. Woolworths added to the gloom with a soft first-half sales report. Paladin slumped after issuing a disappointing quarterly activities report.

Asian markets were mixed. Japan's Nikkei was up 0.2%, Shanghai down 0.24% and Hong Kong's Hang Seng up 0.38%. Dow futures were at a mildly bullish +24.

The spot gold price rallied more than $3 to $1,100.30 an ounce. Crude oil futures were little changed at $74.58 a barrel.


An ugly morning all round. I've been scalping here and there but paper losses on TEN and MML may account for most of the profits unless the market turns. Profits taken on bounces in MMS (from Monday), AMC, ORI, PAN, PDN and AQA.