Shares are set to close higher for the first week in four despite a sell-off this morning amid profit-taking following the market's best session in seven months.
At lunchtime the ASX 200 was trading 23 points or 0.4% lower at 5445 and on track to finish the week well above last Friday's close at 5405. The weekly gain was built on a 1.6% surge yesterday that offset weakness earlier in the week. Yesterday's rally came amid excitement in the US after the Chair of the US Federal Reserve, Janet Yellen, delivered an upbeat economic outlook but backed off from previous hints that interest rates will rise in the first half of next year.
Gold stocks were the pick of the sectors, jumping 4.4% following a breakout in the price of the metal overnight. Spot gold retreated $7.40 this morning to US$1,312.60 an ounce, just below last night's settlement price of US$1,314.10 an ounce.
The Small Ords +0.3% and property trusts +0.4% were the only other sectors to resist the downswing. Telecoms -0.8%, I.T. -0.8%, consumer staples -0.7% and energy -0.6% were hit hardest.
“Investors need to be asking whether the Fed and Yellen will prove to be as stubbornly dovish on monetary policy as much of the commentary now assumes,” Ric Spooner, chief strategist at CMC Markets, told Bloomberg. “Market thinking on this may be tested if U.S. economic growth and inflation rates continue to improve in coming months. With little on the slate in terms of economic releases, today may be a typically quiet session for markets.”
China's Shanghai Composite extended yesterday's losses, falling another 0.29%. Hong Kong's Hang Seng gained 0.36% and Japan's Nikkei 0.32%. Dow futures were recently off six points or less than 0.1%.
Crude oil futures edged up eight cents this morning to US$106.70 a barrel. The dollar was buying 94.07 US cents.
The market is working off some of yesterday's excesses. No technical damage done so far. Trading: seems to take me longer each day to find a trade. Had a very profitable session yesterday and could afford to ignore the early half chances today and wait until CTX looked oversold in the low $21.30s. Hoping for a decent bounce because that price doesn't offer much leverage.
