Regional markets plunged this morning as fears of a potential sovereign default in Dubai rippled around the globe.
At lunchtime the ASX 200 was down 124 points or 2.65% at 4583, its biggest tumble in five months. Asian markets also slumped. Japan's Nikkei slid 1.94% to its lowest level since July. Shanghai, which fell 3.6% yesterday, was down another 1.22% in early trade today. Hong Kong's Hang Seng fell 2.64%.
In Australia, no sector was spared. The heaviest falls were in cyclical sectors such as finance, down 3.4%, metals & mining -2.9%, materials -2.9% and industrials -2.6%. Defensive sectors such as telecoms -0.7% and consumer staples -1.1% fared relatively well.
"It’s carnage across the market," IG Markets research analyst Ben Potter told Fairfax. "Really, it’s not pretty at all. Dubai has tried to stall repayments, which has triggered fears they will default."
The Australian dollar's losses since yesterday's close climbed to 2 US cents this morning. It was recently buying 90.4 US cents.
Dow futures are currently pointing to a big red open to tomorrow's holiday-shortened session in the US. The futures index was recently off 197 points or 1.89%.
Crude oil futures dipped 15 cents to $76.04 a barrel. Spot gold is recovering from a minor dip this morning and was recently trading at $1,190.30 an ounce.
Well, our market looked like it needed an enema and it certainly got one today. May not be such a bad thing in the weeks ahead. If you're lucky enough not to have held overnight, these big red days can deliver good, quick profits. I caught bounces in LNG, CTX and BCI. Alas, anything held from yesterday is bleeding all over my desk. Medic!
