daytrading august 1 afternoon

Thanks Endless.

Half-time round-up:

Australian shares are on course to break an eight-session winning run after reports of a government plan for a deposit levy on banks overshadowed unexpectedly strong Chinese manufacturing data.

At lunchtime the ASX 200 was 16 points or 0.3% in the red at 5035 as falls amongst the big banks outweighed gains in the rest of the market. The financial sector, which accounts for about 30% of the index, slumped 2% this morning amidst reports that the government will on Friday announce a new deposit insurance levy. The levy, which is set to raise billions of dollars, is said to apply to protected deposits up to $100,000. Read more here.

The materials sector rallied 0.8% after China's monthly government manufacturing report defied expectations of a contraction. The official manufacturing purchasing managers' index came in at 50.3, versus economists predictions of a reading around 49.8. HSBC's rival gauge, which measures activity among smaller factories, came in unchanged from the advance reading at 47.7, an 11-month low.

US futures rallied strongly following the Chinese data. Dow futures were recently up 65 points or 0.4%. Asian markets were also well ahead. Shanghai advanced 1.24%, Hong Kong's Hang Seng 0.95% and Japan's Nikkei 1.26%.

House prices in Australia improved for a second straight month during July. Capital city values increased by 1.6%, following a 1.9% advance in June. Manufacturing remained in a slump. The AiG Performance of Manufacturing Index skidded 7.6 points to 42 in July.

Crude oil futures retreated two cents this morning to US$105.36 a barrel. Spot gold was $1.40 weaker at US$1,322.50 an ounce. The dollar was buying 89.6 US cents.


The sudden downturn in the index just after 11pm had me scratching my head until reports of the deposit levy emerged. That news put the kibosh on what was otherwise shaping up as a very promising rally. Instead the index is showing a nasty-looking pincer double top. Hopefully those bullish US futures will improve the outlook before the close. All the same, I had my best morning of a not-very-impressive week. Took a couple of hours for bounce trades in CCU and BND to come good. Also did well out of AVQ from yesterday.