Thanks, Endless, for the morning thread and for the apt thread title. And thanks, guys, for all the kind words and overwhelming number of thumbs - it's cheering to see so much good will on a dark day.
Half-time round-up:
The Australian share market suffered its biggest one-day fall since the depths of the GFC this morning and is on track to end a grim week more than 7% lower.
At lunchtime the ASX 200 was off 162 points or 3.8% at 4114, a level last seen in July 2009. Cyclical stocks and small caps fared worst during a brutal morning that spared no sectors. The Small Ordinaries tumbled 5.5%, energy 5.5%, metals & mining 4.9% and consumer discretionary stocks 4.6%. Even the gold sector, normally seen as a safe haven in times of market stress, fell 4%.
The market dipped under 4100 for the first time in two years in the opening minutes of trade and fell to a 25-month low at 4087 when a modest mid-morning recovery failed.
"We're seeing a total collapse of confidence," fund manager Peter Wright of Bizzell Capital Partners told Fairfax. "Three big sell-offs in a row like this haven't been seen since the GFC. "In some ways the underwhelming volume of the past six months has been anticipating something like this coming. It's been a hell of a week."
Asian markets suffered falls of similar magnitude, with China the pick of a bad lot. Japan's Nikkei fell 3.36%, Shanghai 1.76% and Hong Kong's Hang Seng 4.28%. Dow futures were neutral at -1.
The grim mood on the market wasn't helped by a lowered growth outlook for the domestic economy released by the Reserve Bank mid-morning. The central bank cut its 2011 growth forecast from 3.25% on May 6 to 2%, warning that Europe's sovereign debt crisis could impact Australian growth.
"The downside risks relate to the fiscal problems in many advanced economies, and have become more prominent over the past three months," the bank said in its quarterly Statement on Monetary Policy, quoted on Fairfax. "Overall, it seems easier to envisage significantly worse outcomes for global growth than it is for significantly stronger outcomes."
Crude oil futures clawed back 12 cents this morning at US$86.50 a barrel. Spot gold was $1.80 stronger at US$1,651.50 an ounce. The dollar was buying US$1.0493.
The vibe on the the thread has been great today, guys - good to see the Dunkirk spirit alive and well. Keep it up. I always have mixed feelings on these big red days. There is good money to be made with some planning and a bit of luck, but any overnight positions are dead-weights and my super will have been smashed. I placed what I thought were very optimistic buy orders miles below yesterday's closes and was ultimately pleased to have a few filled. LNC, BND, DCG and BLD paid off handsomely within the first hour. AAX was marginally profitable and I bailed on ALK for the loss of a point. NBS was my only foray into the speccy end and that recovered well.
