Daytrading May 11 afternoon

Thanks Brit and morning regulars.


Half-time round-up:

The share market rallied strongly this morning before paring gains in cautious trade ahead of tomorrow's Federal Budget.

At lunchtime the ASX 200 was trading 13 points or 0.2% higher at 5648 but well off the session high of 5699 as traders once again sold yield sectors. Telecoms fell 0.7%, consumer staples 0.4%, financials 0.3% and health 0.1%. Energy was the best of the sectors, rising 2.1%, followed by metals & mining +1.5%, industrials +0.8% and consumer discretionary +1%.

Asian markets showed more enthusiasm for news that the People's Bank of China cut its key rate over the weekend for the third time in six months. The Shanghai Composite rallied 1.18%, Hong Kong's Hang Seng 0.52% and Japan's Nikkei 1.25%. Dow futures were recently off five points or less than 0.1%.

“Given that China’s growth and inflation are below targets, additional stimulus seems to be the right response,” Steven Milch, chief economist at Suncorp Wealth Management, told Bloomberg. “Versus bonds, equities don’t look stretched but if you look at PE ratios on some markets, whether it’s the US or Australia, you could conclude that the markets are above fair value. Some of that has been corrected in the last couple of weeks. Equity markets may look above fair value but not excessively so.”

Back home, business confidence was unchanged last month despite a mild deterioration in conditions. Confidence held steady at +3 index points, while conditions eased to +4 from +6 in March.

Crude oil futures eased eight cents this morning to US$59.31 a barrel. Spot gold was $1.10 firmer at US$1,188.60 an ounce. The dollar was buying 78.97 US cents.


Boy are the instos having fun with this market, dumping into the strong opening volume to take advantage of all the weekend enthusiasm, pushing the index into the red, then running it back up once all the stops had been hit. Can't really imagine a much better set-up after our worst week in two years than a Chinese rate cut and strong relief rallies in the US and Europe and yet here we are, barely ahead. Trading: very few of the sort of set-ups I usually seek this morning. Missed CLQ and MOZ, but got SXL for a wage.