Daytrading July 3 afternoon

Thanks Oscar and morning regulars.


Half-time round-up:

Australian stocks look set to end in the red for a second straight week after China's bear market intensified this morning and local traders pared their exposure ahead of Greece's bailout referendum.

At lunchtime the ASX 200 was trading 106 points or 1.9% lower at 5494 and poised to close well beneath last Friday's closing level of 5546 despite a three-session mid-week rally. A broad sell-off today was led by resource stocks. The energy sector skidded 2.9%, gold 2.6%, metals & mining 2.6% and materials 2.5%.

China's Shanghai Composite plunged more than 7% this morning, extending a dramatic collapse that drew the index into a technical bear market this week. The index was last off 5.11%. Today's rout came despite a series of attempts this week by the authorities to put a floor under the market.

"When investors lose confidence and rush to sell, these short-term measures will be hardly sufficient to stop the rout," Chen Xingdong, chief economist at BNP Paribas, told Fairfax. "In the long term, regulators should let the market play a bigger role. Official media have been talking up the market and people have been chasing hot stocks regardless of their fundamentals."

Hong Kong's Hang Seng was down 0.51% and Japan's Nikkei 0.45%. Dow futures were recently off nine points or less than 0.1% ahead of tonight's public holiday.

Crude oil futures dropped 29 cents this morning to US$56.64 a barrel. Spot gold was $2.80 stronger at US$1,166.30 an ounce. The dollar was buying 75.88 US cents.


I like volatility, but a 7% drop in a day would be tough on the nerves. My hands are full coping with our fall of 1.9%. If you were going to design a market to mess with my head the day before a week's holiday, it's this one - lots of opportunities to buy cheap but the very real danger that they won't recover by the end of the day. Fortune has so far not favoured the brave - underwater or break-even in positions in FXJ, ILU and AWC. Bounce, damn you. I promised the wife I wouldn't spend the holiday checking share prices...