daytrading march 22 pre-market

Morning traders.

Market wrap:

The share market is staring at a fifth day of falls and its worst weekly return since May after European worries and weakness in US tech stocks dragged Wall Street lower overnight.

The June SPI 200 futures contract ended the night session 35 points or 0.7% in the red at 4935 as a partial rebound in US stocks faded in the final hour.

The S&P 500 retreated for a fourth time in five sessions as Europe's woes overshadowed improving US economic data. The index lost 13 points or 0.82% after closing within a few points of a record high yesterday morning. The Dow gave up 91 points or 0.63% after earlier falling as much as 128 points. The Nasdaq slumped 0.96% after an earnings miss from Oracle and analyst downgrade for Cisco.

The market defaulted to "risk off" mode as the European Central Bank set a Monday deadline for a Cyprus deal and weak economic figures undermined confidence that the euro-zone is emerging from a downturn. The ECB said it will withdraw funding from Cypriot banks unless the government strikes a bailout deal with the EU and IMF by Monday. Read more here. European finance ministers are due to hold a conference call this morning to discuss the situation.

"Cyprus is a looming issue — not because it's economically important... but for Europe, which could see a bank run in another country. Secondly, the ECB has said you have until Monday, which could lead to Cyprus being removed from the euro," the chief investment strategist at Janney Montgomery Scott in the US told MarketWatch. "The market seemed to be seeking an excuse to correct. The bias is to go down, unless there is some positive event."

Also pressuring European shares was an unexpectedly weak manufacturing report from Germany, seen as the engine room of the European recovery. The preliminary purchasing managers' index slumped to a three-month low of 48.9. A composite measure of economic activity across the euro-zone delivered its weakest result in four months. Germany's DAX share index dropped 0.86% overnight, France's CAC 1.42% and Britain's FTSE 0.68%. Trading in Cyprus remained suspended.

Traditional measures of risk appetite in the US declined despite upbeat domestic economic news. The Dow Jones Transportation Index lost 1.62% and the Morgan Stanley Cyclical Index declined 1.3% in spite of a third month of gains in the Conference Board's leading economic indicators, a sharp pick-up in manufacturing in the greater Philadelphia region and a three-year high in home sales.

Oil fell as low as US$91.84 a barrel on the deteriorating European economic outlook before staging a partial recovery. West Texas Intermediate crude for May delivery was lately down $1.12 or 1.2% at US$92.39 a barrel.

Copper was caught in the general retreat from risk assets despite upbeat manufacturing data from China yesterday, but other metals made gains. HSBC's preliminary Purchasing Managers' Index jumped to 51.7 this month from 50.4 in February as orders picked up. US copper for May delivery was recently off 0.25% or about a cent at US$3.44 a pound. In London, copper lost 0.4% and aluminium 0.6%. Lead gained 0.6%, nickel 0.5% and zinc 0.15%. Tin was flat.

"Economic activity in China has picked up after the new year holiday and we expect to see improved economic figures in coming months lending support to prices," an analyst at Commerzbank told Reuters.

The ECB's Monday deadline delivered gold another night of gains as traders sought a safe place to park cash. Gold for April delivery was recently ahead $6.10 or 0.4% at US$1,613.60 an ounce.

TRADING THEMES TODAY

WORRYING SIGNS: The Australian market has been sinking all week and appears unlikely to rebound today unless this morning's euro-zone conference call of finance ministers produces a Cyprus circuit-breaker. There have been plenty of negatives for the bulls to absorb in the last 24 hours. US traders ignored a lot of upbeat economic figures last night. Cyclical stocks, which have been leading the advance in the US, are now coming off hard. Buy-the-dip traders did their best but the now-expected bounce didn't hold, with the major indexes finishing not far above their lows. Australian shares saw little benefit from yesterday's improved Chinese manufacturing report and it didn't appear to do much for commodity markets overnight. Cyprus accounts for much of the deterioration in sentiment but it's hard to see it as much more than an excuse for a tired market to retrace. In the absence of game-changing news, further weakness appears likely.

ECONOMIC NEWS: The Conference Board's leading index is due at 10am EST. Europe has the German Ifo business climate report due tonight. A busy week in the US ends with a whimper - no major reports scheduled tonight.

Good luck to all.