daytrades april 8 pre-market

Morning traders.

Market wrap: Shares are set to open modestly weaker after another earthquake in Japan and a jump in oil helped drive US and European equities lower overnight.

The June SPI futures contract ended the night session 5 points or 0.1% off at 4933 as gold marked a new record, industrial metals rallied and oil burst through the US $110-a-barrel level.

US stocks slumped in early trade after Japan was hit by the worst aftershock since the March 11 earthquake and tsunami, a tremor registering a magnitude of 7.1. The Dow fell nearly 100 points before recovering to close 17 points or 0.14% in the red. The S&P 500 fell 0.15% and the Nasdaq 0.13% as investors also digested the prospect of a government shutdown as early as this weekend as a political stand-off over the federal budget continued.

"Investor pysches are a little fragile," the chief investment officer for PNC Wealth Management in the US told Bloomberg. "It's not surprising investors stepped to the sideline until they could find out whether this new earthquake would cause significant damage. We're working through the issues on the [US federal] budget deal. That's not a significant negative, but we'd probably like to see that resolved without a shutdown."

Japan's Nikkei share index is set to open around 1.55% in the red this morning, according to recent futures, following the 7.1 quake off the coast of Miyagi, 345 kilometres north-east of Tokyo. The quake triggered a tsunami warning, later withdrawn. CNN said police had reported no casualties as yet. Read more here.

Oil set a new 30-month high as fire ravaged a Libyan oil-field and a fall in US jobless claims stoked optimism about the economic outlook. Light sweet crude for May delivery was recently up $1.44 or 1.3% at US $110.27 a barrel.

Silver advanced for a fourth night and gold for a third as a European interest rate rise underlined the threat from inflation and Japan's earthquake encouraged safe-haven buying. May silver was recently up 25 cents or 0.6% at $39.64 an ounce. Gold for June delivery was up $1.20 or 0.1% at $1,460 an ounce.

Copper rallied for a third night and tin neared its mid-February record level as industrial metals shrugged off the 0.25% rate increase in the euro-zone. In London, copper rallied 1%, aluminium 0.3%, nickel 2.1%, tin 0.9% and zinc 0.55%. Lead eased 0.4%. US copper was recently ahead 1.1%.

"I think people are continuing to bet big on the global recovery... everything is hanging in there even though we are looking at additional rate hikes," the head of trading with Kingsview Financial in the US told Reuters. "From an inflation-fighting standpoint, things are going to have to get a lot more serious before it starts to spook investors. A 25 basis-point hike [in Europe] is not going to have a huge impact."

The major European markets gave up initial gains as news of the earthquake in Japan reached traders late in the session. Britain's FTSE lost 0.56%, Germany's DAX 0.5% and France's CAC 0.49%.

TRADING THEMES TODAY

UNDER PRESSURE: The headwinds picked up overnight, with a setback in Japan (see below) and oil hitting its highest level since September 2008. Bulls can find positive omens in the fact US stocks finished well off their lows, key resources improved and the US earnings season starts next week. Bears can point to soft Nikkei futures, the negative performances of BHP, RIO and AWC in US trade overnight and over-extended stochastics following three weeks of steady rises on our market.

AFTERSHOCK IN JAPAN: The early indications seem to be that Japan has survived last night's 7.1 magnitude quake with minimal damage, but it's another setback on the world's third largest economy's road to recovery. Nikkei futures are flagging an open around 1.55% weaker this morning and the index's performance from there will impact on how our market fares today.

ECONOMIC NEWS: A slow week for scheduled news ends with a whimper: nothing scheduled here and just monthly wholesale inventories ahead in the US tonight.

Good luck to all.