Shares staged a partial recovery from a one-month low this morning as the US dollar retreated and oil, gold and US equity futures rallied.
At lunchtime the ASX 200 was 25 points or 0.4% in the red at 5800 but more than 50 points off the session low of 5749. Property trusts +1.2%, utilities +0.6%, IT +0.2% and industrials +0.1% were the only sectors to advance. The metals & mining sector was the biggest drag, falling 3.4% as BHP traded without its dividend.
The market pared its losses as a retreat in the greenback took some of the pressure off other asset classes. Dow futures were recently 49 points or almost than 0.3% higher at 17,719 a few hours after the blue-chip index's worst night in five months. The Australian dollar was a third a cent above its overnight low at 76.35 US cents. Crude oil futures rebounded 70 cents this morning to US$48.99 a barrel. Spot gold was $4.10 stronger at US$1.164.20 an ounce.
Wall Street sold off heavily for a second session in the last three as investors sold stocks in anticipation that the Federal Reserve will start raising rates by the middle of this year.
“Rates are moving soon,” Evan Lucas, market strategist at IG, told Bloomberg. “The jobs report on Friday has awoken the currency markets to this fact and the equity market is now feeling the early effects of what is to come.”
Asian markets were mixed. China's Shanghai Composite rallied 0.82%, Hong Kong's Hang Seng dipped 0.14% and Japan's Nikkei rose 0.41%.
The morning's domestic economic data highlighted weakness in the economy with declines in consumer confidence and home loans. The WBC-MI consumer confidence index fell to 99.5, below the 100-point level where optimists outnumber pessimists. Home loans slumped 3.5% in January.
Another tough day at the office, but the mood is very different to Monday. There is clear interest in buying the dip here today with movements in other markets hinting at a possible sea change. Trading: I was with Meme on AAD - late to the party, but there was enough in the punch bowl for a very nice start to the day. Something fishy there - companies don't lose a quarter of their value just because the CEO goes, even if the instos don't like the successor. Would love to know what was said at the conference call. In an ideal world, ASIC would also look at the trading in MNC before the release of the annual financial statements this morning - big volume before the accounts came out. Also traded FXJ, one of my regular trades. Made money on CWN yesterday and went back in today, but the blighter has not yet come good. Was a day early into RSG and MND yesterday - picked the wrong day for overnight holds. Oh dear.
