daytrades may 3 afternoon

Thanks Tweets. Half-time round-up:

Australian shares traded lower for the sixth session in seven today but pared heavy early losses as the big miners staged a partial recovery.

At lunchtime the ASX 200 was down 22 points or 0.46% at 4785 but well above the morning low of 4753. The mining sector suffered substantial losses after the weekend announcement of a new resources tax. Mining giants BHP and RIO both lost more than 4% in early trade. The metals & mining index was off nearly 4% but more recently was at -2.6%. Elsewhere, there were gains for financial stocks +0.2%, health +1%, IT +1.2% and property trusts +0.5%.

The odds on a lift in the cash rate tomorrow increased with separate reports this morning showing rising inflation and house prices. The TD Securities-MI inflation gauge rose by 2.9% in the year to April - the biggest jump in 14 months. Capital city home prices have rocketed by 20% in the last year, according to ABS figures released this morning. Prices rose 4.8% last quarter.

"I think the RBA will take notice of the acceleration in what is essentially house price inflation," Citi economist Josh Williamson told Fairfax.

Credit Suisse figures quoted on Fairfax say investors see a near-70% chance of a quarter-percentage point increase in the cash rate to 4.5% when the Reserve Bank board meets tomorrow.

Elsewhere, a survey released this morning showed local manufacturing expanded at its fastest pace in nearly eight years last month. The AIG-PricewaterhouseCoopers performance of manufacturing index (PMI) rose 9.3 index points to 59.8 points in April. Readings above 50 indicate expansion.

"The April Australian PMI shows a sector gaining lost ground as activity across the economy broadens," Ai Group chief executive Heather Ridout said in a statement.

Asian markets retreated. Hong Kong's Hang Seng fell 1.35% and Singapore 0.8%. Several other Asian markets were closed for public holidays. Dow futures were recently at +26.

Crude oil futures rallied 15 cents or 0.17% this morning to $86.30 a barrel. The spot gold price slipped $1.20 to $1,178.10 an ounce.


A brighter session than anticipated, with much of the resources tax news already factored in, judging by this morning's action. I should have been more aggressive. Turned modest profits on recoveries in CEY, ERA, KZL and ARM. PVE edging higher - I guess the new tax makes even Italy's ponderous regulatory environment look inviting.