Australian shares retreated in low-volume holiday-affected trade this morning as Asian markets struggled for direction after China reported its worst trade deficit in 23 years.
At lunchtime the ASX 200 was down six points or 0.15% at 4205 as modest gains in small caps, resource stocks, industrials and the consumer discretionary sector were outweighed by losses among financials and defensive sectors.
"You could nearly cancel the day through lack of interest," Bell Potter senior adviser Stuart Smith told Fairfax as a public holiday across much of Australia sapped buyer interest. "Unless something happens through the day, it is not much good for the brokerage team."
Asian markets were mixed but little changed after China announced over the weekend a smaller-than-expected increase in January exports and a jump in imports. Coupled with Friday's weak industrial production figures and soft inflation data, the report raised concerns that the Chinese economy is cooling faster than predicted.
"Overall, economic conditions are getting weaker at a fast pace," a Nomura economist told Fairfax. "The slowdown is happening faster than the government expected."
Japan's Nikkei rallied 0.42% this morning, Shanghai fell 0.08% and Hong Kong's Hang Seng was flat%. Dow futures were recently off 18 points or more than 0.1%.
Crude oil futures dropped 46 cents this morning to US$106.96 a barrel. Spot gold softened $4.90 to US$1,708.50 an ounce. The dollar was buying US$1.0541.
Nice to see the Small Ords continuing to outperform, but there's not much activity further up the food chain. Slow start to the week here - missed the turnarounds in DLS and IAU. Small intraday speculators in MNM and AMX. Watching a few more but these volumes make intraday trades tougher.
