Daytrading August 13 afternoon

Thanks Brit and morning regulars.


Half-time round-up:

Australian shares rebounded from a seven-month low this morning as the dollar and equities shrugged off news that China devalued the yuan for a third straight day.

At lunchtime the ASX 200 was trading 33 points or 0.6% ahead at 5415 as gains in the gold sector +4.2%, energy +2.4%, metals & mining +2.1% and financials +0.8% offset weakness in IT -3%, telecoms -1.8% and property trusts -0.1%.

The benchmark index briefly dived 18 points and the dollar dropped half a cent after the People's Bank of China moved the yuan's reference peg up 1.1% against the US dollar. However, both quickly recovered in a signal that investment markets are becoming more comfortable with the yuan's devaluation. This morning's move pushed the yuan to a fresh four-year low against the greenback following cuts in the reference rate of 1.6% yesterday and 1.9% on Tuesday.

Asian markets rallied. China's Shanghai Composite was lately up 0.43%, Hong Kong's Hang Seng 0.27% and Japan's Nikkei 0.42%. Dow futures were up nine points or less than 0.1%.

Crude oil futures edged up a cent this morning to US$43.31 a barrel. Spot gold was $1.30 weaker at US$1,122.30 an ounce. The dollar was buying 73.93 US cents.


If the first two yuan devaluations were a shock, the market appears to be prepared for further weakness now. Not that you could count this morning's bounce on the XJO as anything more than technical relief just yet - we saw something similar on Monday and the market then tanked 127 points in two sessions. Well have to see how Wall Street fares tonight. I'm thinking bounce, but best keep an open mind. Trading: swung and missed at AWD and SGN, both of which would have been nicely profitable. Instead ended up with PRA and NMT. Neither have come good yet.