The Australian share market is on track to break a six-session winning streak following a drop-off in building approvals and a negative reaction to Woolworths' full-year sales report.
At lunchtime the ASX 200 was trading near the bottom of its intraday range, down 13 points or 0.3% at 5033. Gains in gold stocks +1.1%, materials +0.3% and telecoms +0.6% were outweighed by falls in consumer staples -1.5%, industrials -0.7% and financials -0.3%.
Woolworths sparked a sell-off among consumer stocks after warning of losses at hardware chain Masters and lower-than-expected profits at Big W. The downbeat market mood was not improved by a sharp decline in building approvals last month. Approvals for the construction of new homes declined by 6.9% from the previous month and 13% from the same month last year.
"The release has not yet triggered much reaction within the equity market, possibly because investors see the bad news as being largely offset by an increasing likelihood of a rate cut next round," CMC Markets manager William Leys told Fairfax.
Asian markets advanced despite a disappointing Japanese industrial production report. The Nikkei rallied 0.42% after industrial output slumped 3.3% last month, the largest decline since the aftermath of the 2011 earthquake and tsunami. Shanghai added 0.2% and Hong Kong's Hang Seng put on 0.42%. Dow futures were recently up nine points or less than 0.1%.
Crude oil futures retreated 25 cents this morning to US$104.29 a barrel. Spot gold was unchanged at US$1,327.40 an ounce. The dollar was buying 91.65 US cents.
This rally had been narrowing for a few days, so it's no real surprise to see it break. Once the financials ran out of puff, a short-term decline looked inevitable. Hooray, then, for the specs. It's only after a few days of looking at charts that I realise how hard they have run over the last month. There are a lot of previously unloved stocks up 100% or more - well done to those who hitched rides. I tend to stick to the less-volatile mid-caps while I get back in tune with the market after a holiday. Rode TCL from near the low today for a fair profit. Exited PDN from yesterday for peanuts. Would like to blame jet lag for a goldfish memory moment this moment: saw the reaction to WOW's profit report, forgot it almost instantly and bought MTS 10 minutes later. Took 10 minutes of mounting losses for me to join the dots. The market gives to those who do their homework and takes from those who can't retain basic information for longer than nine minutes.
