Market wrap: public holidays yesterday in the US and UK mean Australian traders have few leads for today. Flat trading in Europe overnight combined with trouble in North Korea and the sudden end of the local ban on short-selling financial stocks may ensure the recent downward drift on the ASX stretches into a fourth session.
News of a nuclear weapon test in North Korea weighed on mainland European trading overnight but key markets pared early losses to finish flat or marginally ahead. The German DAX was unchanged at 4,918 and the French CAC-40 gained 0.2% to 3,236.
Commodity markets in London and New York were closed for holidays. Copper and aluminium recorded slim gains in Shanghai trading as buyers ignored the news from North Korea. “If you'll excuse the pun, there wasn't much fallout for Shanghai metals from the North Korea bomb test,” a dealer in Singapore said.
Gold held onto gains to finish near its high overnight at $957.90.
Futures traders expect a muted start to the day. The SPI last traded 8 points lower at 3743.
So an uncertain day lies ahead. You would expect gold and gold stocks to benefit from tension on the Korean peninsula but there was limited evidence of that on the local bourse yesterday after recent strong gains. It will be interesting to see if yesterday's losses in the short-sellers' old favourites (banks, REITs) were a knee-jerk reaction or the start of a period of prolonged weakness.
PS Many thanks to Jdcav for producing market wraps for the forum since Friday - very nice work.
