The share market resumed its downtrend this morning as a profit warning from Qantas and a blowout in the trade deficit compounded overnight weakness on Wall Street.
At lunchtime the ASX 200 was 33 points or 0.6% in the red at 5239 and on course for its fourth loss in five sessions. The big banks did much of the damage, pulling the financials sector down 1.3%. Industrials lost 0.8% after Qantas announced a first-half loss of up to $300 million and said it will cut 1,000 jobs.
Resource stocks rallied following overnight gains in iron ore and metals. The metals & mining sector advanced 0.7%, materials 0.6% and gold 0.3%.
The dollar turned lower on news that the trade deficit increased to a seasonally-adjusted $529 million during October from $271 million in September. Exports fell 1%, while imports increased by the same percentage. The dollar was buying 90.46 US cents.
"The hate-fest continues for the Aussie," Westpac senior currency strategist Sean Callow told Fairfax. "And that's despite commodity prices. Iron ore's up 1.1 per cent to a high since 15th August. Gold jumped and copper's up 2.6 per cent. There are reasons to be optimistic about the Aussie, but it's yet to show through in price action at all."
Asian markets retreated. China's Shanghai Composite was down 0.08%, Hong Kong's Hang Seng 0.25% and Japan's Nikkei 0.36%. Dow futures were recently off one point or less than 0.1%.
Spot gold pared overnight gains, recently down $4.50 for the morning at US$1,238.60 an ounce. Crude oil futures were unchanged at US$97.18 a barrel.
Looks like there was a trade in QAN but I stayed away - did not like the tone of that announcement. Not much love for the goldies either this morning - sellers don't seem to think last night's counter-trend rally has legs. I had no problem finding trades this morning. Profits, on the other hand... Caught the low in ADO - hurray. Scalped GWA and WTP off their lows - hurray. Underwater on TTS - boo. Substantially underwater on API - boo. More cheers and boos than a Christmas panto.
