Australian shares were sharply lower at lunchtime as Chinese shares eased and local business confidence slumped to a 14-month low.
At lunchtime the ASX 200 was down 35 points or almost 0.8% at 4559, with all sectors trading lower. Losses were heaviest among metals & mining -1.1%, I.T. -1.1%, health -1% and materials -1%. The financials sector was 0.7% lower after NAB reported quarterly earnings of $1.1 billion. Shares in the bank were recently trading 1.5% weaker.
A big trade surplus and the uneasy cease-fire on the mining tax failed to boost business confidence. The NAB's business confidence index fell 2 points in July to 2 points, indicating the divide between optimists and pessimists is the narrowest this year. Business conditions fell 4 points.
"Aggregate confidence has now fallen continuously from January 2010 and is at the lowest reading since May 2009," the report said.
Asian markets were notably mixed, with Japan's Nikkei up 0.53% as a weaker yen helped exporters, and Shanghai down 0.92% ahead of this week's monthly economic reports. Hong Kong's Hang Seng was recently off 0.8%. Dow futures were recently at -22.
Crude oil futures retreated 14 cents this morning to $81.31 a barrel. The spot gold price slipped back under $1,200 an ounce, trading recently at $1,199.10. The dollar was buying 91.3 U.S. cents.
This morning's pullback leaves the ASX 200 mid-June resistance level intact. Have we seen the high for this run or is there more to come? Does Bernanke dare disappoint the market tonight? A mixed morning at this trading desk. Successful scalps in ESG and RNI, but break-even is starting to look good for an AZZ trade. Also holding DOM from today's low.
