Shares retreated this morning as oil marked a new six-year low and investors dumped yield stocks ahead of tonight's US Federal Reserve policy statement.
At lunchtime the ASX 200 was 15 points or almost 0.3% lower at 5827 with some of the biggest hits coming to sectors seen as attractive for their dividends when interest rates are low: utilities down 1.4%, property trusts 1.1% and consumer staples 1%. Health stocks rallied 0.8%, metals & mining 0.6% and materials 0.2%. Energy stocks declined 0.7% after US crude oil futures cents fell 84 cents to US$42.62 a barrel.
The declines came amid speculation that the Fed will tonight clear the way to a mid-year rate hike by adjusting its policy guidance at the end of this month's two-day meeting.
“Markets are a bit nervous ahead of the meeting,” Shane Oliver, global strategist at AMP Capital Investors, told Bloomberg. “It’s possible that the market will be left none-the-wiser about whether the first rate hike will come in June or September, but we are undoubtedly getting closer.”
The morning's economic data pointed to a pick-up in the economy in the second half of the year. The WBC-MI leading index, which predicts economic activity three to six months into the future, rose to +0.45% last month from -0.32% in January.
"After showing persistently weak, sub-trend momentum over the last 12 months, this is the most promising result in quite some time," Westpac senior economist Matthew Hassan told Fairfax. "It suggests that the Australian economy will start to regain some momentum towards the end of this year, although it remains to be seen how well this pick-up is sustained."
Asian markets were mixed. China's Shanghai Composite put on 0.31%, Hong Kong's Hang Seng added 0.72% and Japan's Nikkei dropped 0.22%. Dow futures were recently up two points or less than 0.1%.
Spot gold rallied $4.20 this morning to US$1,152.40 an ounce. The dollar was buying 76.21 US cents.
Geez, if any more cannabis related companies list on the ASX my mum won't let me work here. The bourse is getting taken over by dope fiends. CMY was that latest to join the Doobie Brothers, alongside PYL and... um... oh man, my brain is so fried I can't remember. You know. Those other dudes that can get their hands on the stuff. Trading: relieved to see OSL follow SRX's lead and come good from yesterday. Always looked like an over-reaction. TPI offered a lovely entry first thing for an easy wage. Got something out of GEG and should have done well on MIN if not for an insto gazump that left me with 375 shares. Took ALQ at round-number support. Got DLX wrong - likely loss there but not enough to undermine a good morning.
