Australian shares gave up early gains this morning as a slide in Chinese imports overshadowed news that Europe will fast-track aid to Spain.
At lunchtime the ASX 200 was weaker for a fourth straight session, down 15 points or 0.4% at 4102 after the big miners and most of the banks gave up initial advances. Defensive sectors provided most of the morning's gains, with telecoms up 1.2%, utilities 1% and health 0.6%. Gold stocks led the declines, falling 1.8% as resource stocks were hurt by evidence of weakening demand from China.
Asian markets were mixed after China unveiled a blow-out in its trade balance and Europe announced swift action to ease Spain's borrowing costs. Japan's Nikkei put on 0.36%, Shanghai 0.09% and Hong Kong's Hang Seng 0.28%. S&P 500 futures were recently down 18 points or 0.1%.
China's trade surplus increased more than expected last month as exports beat expectations but imports came in well below target, increasing fears that an economic slowdown is accelerating. Exports were 11.3% higher than the same time last year, while imports eased to 6.3%. Analysts surveyed by Dow Jones had been tipping imports would be up 10.4% from last year.
European finance chiefs announced plans to advance Spain 30 billion euros by the end of the month to support its cash-strapped banks. Eurogroup chief Jean-Claude Juncker said Spain would also get an extension on its austerity targets.
Business conditions in Australia improved last month but confidence deteriorated. NAB's monthly survey showed business conditions rising three points to -1 and confidence shedding a point to -3.
Crude oil futures sagged 82 cents this morning to US$84.90 a barrel. Spot gold was $2.70 softer at US$1,584.60 an ounce. The dollar was buying $US1.0174.
China hasn't done us any favours this morning, with its import data snuffing out a promising rally. Oil has gone into freefall. It's been the wind beneath our wings for so long that it's hard to accept it's now behaving more like a lead-weight. This morning's brief rally in RSG gave me a profitable exit from a buy late yesterday. Also added BSE and CSR near their lows.
