Daytrading March 2 afternoon

Thanks Beany and morning regulars.


Half-time round-up:

Shares surged to a new six-and-a-half-year high this morning as a Chinese rate cut and the possibility that the Reserve Bank will follow suit tomorrow offset a soft end to last week on Wall Street.

At lunchtime the ASX 200 was trading 54 points or 0.9% ahead at 5983, a post-GFC high. The gains were broad, with resource sectors benefitting from a weekend rate cut in Chin and rebounds in key commodities, and yield sectors finding buyers ahead of tomorrow afternoon's RBA policy meeting. Property trusts +1.7%, metals & mining +1.5%, materials +1.4%, telecoms +1% and financials +1% saw the best gains. Consumer staples was the only sector to retreat, falling 1.6% as WOW continued to be punished for Friday's profit downgrade.

Chinese shares turned lower after the People's Bank of China cut its key lending and deposit rates for the second time in three months and HSBC upwardly revised its final gauge of February factory activity to 50.7 from an initial reading of 50.1 and a January level of 49.7. The Shanghai Composite and Hong Kong's Hang Seng were lately both down 0.31%. Japan's Nikkei rose 0.12%. Dow futures were recently up 24 points or more than 0.1%.

“China is clearly slowing down, you don’t cut rates twice in three months if things are going stunningly well,” Mark Lister, head of private wealth research at Craigs Investment Partners in New Zealand, told Bloomberg. “It’s clear markets are being driven by other factors besides earnings, and key is the ongoing loose central-bank policy around the world.”

Crude oil futures fell 32 cents or 0.6% this morning to US$49.44 a barrel. Spot gold was $5.90 firmer at US$1,219.60 an ounce. The dollar was buying 77.93 US cents.


Traders seem to be taking the 'glass half-empty' view of China's rate cut - that they wouldn't cut unless things are worse than they appear. Back home, there was some turbulence at the lower end of the market this morning. A few trading favourites took a deep bath - NEU, NWT, MBN, GTG, OIL. Managed two bounce trades in NEU, one each in OIL and MBN, plus a scalp in MTS for a very good start to the week. Volatility rules. Been good for the last two months. Mind you, I could probably have achieved similar returns by parking my trading capital in yield stocks and watching TV.