Shares declined for a second day as Asian markets lost ground, European leaders held back a rescue package for Greece and the Reserve Bank cut its growth outlook.
At lunchtime the ASX 200 was down 24 points or 0.6% at 4258 as local investors continued to push the big two miners, BHP and Rio Tinto, lower following this week's earnings reports. Metals & mining was the weakest of the sectors, falling 1.3%. Telstra rebounded after yesterday's sell-off and gold stocks advanced 1.2%.
"Rio and all the miners are weighing on the market," Michael Heffernan, strategist at Austock Group, told Fairfax. "I thought that Rio's wasn't a bad report yesterday, certainly a bit better than BHP's, but people don't like to see $8.9 billion write-downs and that's what Rio did... If we can put Greece behind us our market is going to do very well."
The mood wasn't improved by the Reserve Bank's quarterly monetary policy statement, which reduced its growth forecast for the first half of the year from 4% to 3.5% and inflation by 25 basis points.
"Growth outside the mining sector is expected to remain below trend over the forecast period," the RBA said in a statement quoted on Fairfax. "In the building industry, conditions remain weak in both the office and home-building sectors. The high level of the exchange rate is also weighing on trade-exposed sectors including manufacturing, tourism and education."
Most Asian markets declined and US futures weakened after European leaders refused to sign off on a second bailout for Greece until austerity measures are passed into law. Japan's Nikkei fell 0.23%, Shanghai added 0.06% and Hong Kong's Hang Seng dropped 0.28%. Dow futures were recently down 25 points or 0.2%.
Crude oil futures eased 16 cents this morning to US$99.57 a barrel. Spot gold was $1.50 stronger at US$1,732.80 an ounce. The dollar was buying US$1.0746.
Not much upside for our market until the BHP/Rio results have been fully absorbed. May take a few more sessions. Meanwhile, Europe is telling Greece they want to see action rather than promises before they hand over the dough. I had a good session yesterday but today has been a fizzer so far. Tossed up between ICN and AGS on pullback and chose poorly. Caught ADY at the low with one of those frustrating part-fills that is barely worth it. Also CGF at support, tight stop.
