Australian shares resisted a region-wide pullback this morning as US futures soured ahead of economic data and debt meetings in Europe this week.
At lunchtime the ASX 200 was off three points or less than 0.1% at 4380 but faring significantly better than bourses in Asia. Energy stocks were the biggest drag on the index, declining 1.5%. The materials sector slipped 0.3% and financials edged up 0.1%. Gold stocks rallied 1.5% as defensive sectors bucked the downtrend.
"Markets should be pausing for breath until we see some more central-bank action," Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors told Bloomberg. "We've had a very strong rally in the last few weeks based on the verbal signs of intervention from the European Central Bank. Authorities are on the right track. It appears they are more united now."
Asian markets dragged US futures south as euro-zone finance ministers prepare to meet to discuss Greece and French President Francois Hollande headed for Berlin to meet German Chancellor Angela Merkel. Japan's Nikkei retreated 0.86%, Shanghai 0.56% and Hong Kong's Hang Seng 0.76%. Dow futures were recently down 37 points or 0.3%.
In economic news, an index of future Australian activity picked up but remained below long-term trends. The WBC-MI leading index, which predicts economic growth up to nine months ahead, improved to 2.4%. The long-term average is 2.7%. Read more here.
Spot gold softened 20 cents to US$1,638.80 an ounce. Crude oil futures were unchanged at US$96.55 a barrel. The dollar was buying $US1.0455.
Been weeks since US futures were so negative at this time of day. Our market is surprisingly resilient in the circumstances. A sign of confidence or complacency? Time will tell. Still plenty of runners this morning. I took profits on KDR from yesterday - could be a lot more in it but I'm concerned that we may be entering a period of broader market volatility. Picked up some ARI for any intraday bounce but the bears are in control at present.
