daytrades may 24 pre-market

Morning traders. Tin hats on standby.

Market wrap: Shares are set to open at a 10-week low after the largest drop in global stocks in two months and sharp falls in commodities.

The June SPI futures contract ended the night session 29 points or 0.62% weaker at 4618 as weak overnight US economic data compounded concerns about a global slowdown following yesterday's soft Chinese manufacturing report and worse-than-expected manufacturing and services figures from Europe.

A credit outlook downgrade for Italy and a rout at the polls for Spain's ruling Socialist Party heightened fears that Europe's debt problems are worsening, dragging an index of global shares down 1.7%, its worst session since mid-March. The S&P 500 fell 1.19%, the Dow 131 points or 1.05% and the Nasdaq 1.59%.

Losses in Europe were heavy as banks and insurers exposed to the credit crisis were sold off and bond yields in Greece and Ireland hit record levels. Britain's FTSE tumbled 1.89%, Germany's DAX 2% and France's CAC 2.1%. Italy's FTSE MIB index lost 3.3% after Standard & Poor's reduced the nation's credit outlook from "stable" to "negative".

"There's bad news out there," the head of asset allocation for ING Investment Management in the US told Bloomberg. "We've got doubts about European fiscal austerity and weaker economic data across the board. The thing that has driven the market higher - [US] earnings season - just came to an end. People will be pulling money out of riskier assets."

An index of economic activity in the Chicago region confirmed the recent downward trend in US data, falling to its lowest level since August. Shares in Shanghai yesterday dropped 2.9%, the index's worst session in four months, after a manufacturing report showed growth slowing this month.

The US dollar and gold benefitted from "safe haven" buying as investors rotated out of so-called "risk assets", including oil, industrial metals and the Australian dollar. The US dollar index was recently up nearly 1%. The Aussie was off nearly 1.5 cents, recently buying US $1.051.

Gold inched to a two-week high, while silver was little changed. Gold for June delivery was recently ahead $8 or 0.5% at US $1,516.90 an ounce. Silver for July delivery drifted in and out of positive territory, recently off 3 cents or 0.1% at US $35.06 an ounce.

Oil was crunched by the rising US dollar and worries about a slowdown in global economic activity. Crude for July delivery was recently off $2.66 or 2.7% at $97.44 a barrel.

Australian miners lost ground in overseas trade as industrials metals were caught in the downdraught. In US trade, BHP fell 1.6%, Rio Tinto 2.8% and Alumina 3%. In London, copper lost 2.9%, aluminium 0.7%, lead 2.6%, nickel 5%, tin 3.9% and zinc 1.3%. US copper was recently down 3.3%.

TRADING THEMES TODAY

NEARING A BOUNCE?: About the only good news to emerge from a bleak night session is that futures traders reckon our market took most of its medicine yesterday. The ASX 200 should open this morning near the bottom of the descending trendline established since the latest pullback began in mid-April. That may encourage some bargain-hunting once the dust settles. The two big miners are very close to significant horizontal support and should find buyers at those levels. Much will depend today on whether Shanghai can recoup any of yesterday's losses. US sector analysis doesn't offer much cause for optimism - defensive sectors, including utilities and precious metals miners, fared better than most overnight but still finished underwater.

ECONOMIC NEWS: Another quiet day ahead for scheduled news. Nothing listed here. The highlights in the US are new-home sales and a regional manufacturing report.

Good luck to all.