Australian stocks briefly erased gains for the year this morning as heavy selling swept through Asia, overshadowing steady domestic jobs data.
At lunchtime the All Ords was 39 points or 0.8% lower at 4676 after hitting an intraday low of 4650, 14 points below where the index closed on December 31. The ASX 200 was 37 points or 0.8% in the red but still above its low for the year.
Financials was the only sector to prosper, rising 0.5%. Top of the sick list was gold -2.9%, followed by consumer discretionary -2.5%, metals & mining -2.5% and energy -2.2%.
The falls came as a brutal sell-off on Asian markets dragged US futures into the red. The Shanghai Composite resumed trade following a three-day holiday with a plunge of 3.18% this morning. Hong Kong's Hang Seng fell 2.65% and Japan's Nikkei was lately down 5.38% after earlier falling more than 6%. Dow futures were recently down 54 points or nearly 0.4%.
"People are still trying to assess the prospects, likelihood, and timing of tapering from the Federal Reserve," a strategist at First NZ Capital told Bloomberg. "Markets want stability in the economy but they also want unlimited stimulus. The two can't continue to exist together."
April employment data came in stronger than expected, but not by enough to cushion the market against the heavy losses on regional markets. The unemployment rate held steady at 5.5% after the economy created 1,100 new positions.
Crude oil futures were down 34 cents or 0.35% at US$95.53 a barrel. Spot gold was ahead for the morning at US$1,394.10 an ounce. The dollar was buying 94.62 US cents.
Just might be getting a capitulation day here in Asia. Australia is behaving well so far but we need a decent rebound to confirm, not an arvo fade. Problem is that, as others have noted, any correction in the US looks to have a lot further to run. Tricky conditions this morning. I was happy to take profits on BTR soon after the open and then set about finding ways to give them back. Nothing like a good win to fill you with over-confidence. Took both PRY and SKE too early and doubled up near the lows. Not out of the woods on either yet. Narrowly ahead on WRT. Just added FXJ, intraday only. Missed a few more at the intraday session low.
