The share market pared a fifth straight winning week as earnings disappointments, a falling oil price and a listless night on Wall Street capped risk appetite.
At lunchtime the ASX 200 was 21 points or almost 0.4% lower at 5883 but still on track to seal a rise for the week with a close above 5877. Consumer staples +1.3% and health +0.4% were the only sectors to improve this morning. Energy -1.9%, financials -0.6%, IT-0.6% and the Small Ords -0.5% anchored the losses.
"Across the market the main lag on the index was the energy sector, with crude oil again falling and Santos with less than impressive reporting numbers," Quay Equities head trader Tristan K’Nell told Fairfax. "The banks were little changed while there was a little rotation from BHP into Rio Tinto. After a mediocre report yesterday we saw Wesfarmers bounce back, shares up 2.88%."
The retreat came as UBS told Fairfax [link above] that a flat earnings outlook for the year ahead would cap share price appreciation: "Overall earnings are set to be flat in FY15 although ex-resources growth is still on track for a robust 9%. Nevertheless with the market up 9% year to date, prices are outstripping earnings... In our view a flat to down profile for the market for the year is more likely from here."
Hong Kong's Hang Seng lifted 0.19% and Japan's Nikkei 0.42%. Trade on China's Shanghai Composite was suspended for a public holiday. Dow futures were recently ahead three points or less than 0.1%.
Crude oil futures bounced 36 cents this morning to US$51.49 a barrel. Spot gold was 50 cents lower at US$1,209.70 an ounce. The dollar was buying 78 US cents.
Feels like the market has run out of puff after one of the most extraordinary one-month surges in my time as a trader. Greece is part of the problem, but you can't be too hard on the birthplace of western civilisation even if they have rested on their laurels for a couple of millennia. (Come on lads, time to make an effort again.) I'm leaning towards an ASX retrace next week unless there is a major change of mood. Trading: bit taken aback at the level of interest in SGN - normally I fly these kamikaze missions alone. The selling took a while to settle down this morning, but buyers now appear to be in control. Slow grind higher from here? Also traded the first bounce in MBT, first pullback in SRI and a half-pip special in NRT. Been a good week.
