The share market is on track for the third loss of a roller-coaster week as mining stocks dropped to their lowest level in four years and Asian markets trade mixed.
At lunchtime the ASX 200 was 35 points or 0.7% weaker at 4969 despite gains for the big banks (financials +0.1%), telecoms +1%, property trusts +0.3% and consumer staples +0.7%. Gold stocks fell 4.4% to a new four-and-a-half-year low, metals & mining 3.6% to a level last seen in March 2009, materials 3.2% and energy stocks 2.9%. The Small Ords lost 1.8%.
"Weak [US] corporate earnings results and renewed concerns about the global economy saw traders switch to a risk-off mode," Matthew Sherwood, head of investment markets research at Perpetual Investments, told Bloomberg.
Asian markets opened underwater, but Shanghai and Hong Kong lately turned positive. The Shanghai Composite inched up 0.05%, Hong Kong's Hang Seng added 0.06% and Japan's Nikkei lost 0.43%. Dow futures were recently up 19 three points or more than 0.1%.
Business confidence rebounded last quarter as European debt fears abated and the global economy appeared to improve. NAB's confidence measure improved to +2 from -5 in the previous quarter and business conditions rallied three points to -2.
Gold extended its overnight loss this morning. Spot gold slumped another $14 to US$1,362 an ounce. Crude oil futures dropped 25 cents to US$86.20 a barrel. The dollar was buying $US1.031.
It really is a two-speed market at present. If you stuck to banks and defensives, you'd be feeling pretty good about things. Resources and specs? Yuck. I made a bright start to the session with early bounce wins in CDA and SFR, then set about finding ways to give those profits back. Re-entering CDA proved effective and BLY did the rest. BRU broke the losing trend. Tempted to hold some CDA and BLY overnight because both look overdone short-term (BLY off 50 cents in six sessions, CDA $1.13 over the same period), but that may be no more than special pleading because I don't want to take the hits.
