The share market is tracking towards its heaviest loss in six weeks after a sharp retreat on Wall Street overnight and declines across Asia.
At lunchtime the ASX 200 was 53 points or 1% weaker at 5239, its poorest performance since a 75-point dive on December 5. The index has managed just two positive closes in nine sessions since the start of the year.
"Shares rallied toward the end of last year without much of a correction and that makes me think the upside momentum for markets is limited this year," Kenichi Kubo, senior fund manager at Tokio Marine Asset Management in Japan, told Bloomberg. "Judging from valuations, markets will struggle to rise further."
Gold stocks surrendered early gains, lately down 0.9%. Hardest hit were IT -1.9%, industrials and consumer discretionary -1.4% and financials -1.2%. The metals & mining sector lost 0.8%.
Japan's Nikkei dived 2.26% as the market played catch-up following a public holiday yesterday. China's Shanghai Composite dropped 0.35% Hong Kong's Hang Seng 0.6%. Dow futures were recently up five points or less than 0.1%.
Crude oil futures bounced 15 cents this morning to US$91.78 a barrel. Spot gold was $2 weaker at US$1,250.90 an ounce. The dollar was buying 90.27 US cents.
And down we go. The market mood can change very quickly during US earnings season, but I can't say the omens are that good right now. I tend to do well in these sorts of conditions, but made heavy work of it this morning. As Krusty noted, I should have been all over FGE like a cheap suit, but had my mind fixed on a lower entry and so missed the boat. Good example of why you should trade what's in front of you, rather than your expectations. Instead, I shared the over-optimistic mood about the prospects for a bounce in NEN. Entered too quickly, repented at leisure. Better result in TEN - nice bounce. Also ahead in RED despite a clumsy entry.
