Daytrading May 14 afternoon

Thanks Brit and morning regulars.


Half-time round-up:

The share market pared two days of gains this morning as the dollar hit a four-month high and ratings agency Moody's warned that banks look vulnerable to a correction in house prices.

At lunchtime the ASX 200 was trading 47 points or 0.8% lower at 5668 as all sectors declined except gold (+0.8%) following a mixed close on Wall Street overnight. Hardest hit were metals & mining -1.9%, health -1.5%, materials -1.5% and telecoms -1%.

The financials sector slid 0.9% after analysts at Moody's issued a note advising clients the risk of a fall in house prices was rising: "Australia is going through a period of sustained house price appreciation and increases in household debt. These trends pose a threat to Australian banks because they increase the risk of an eventual correction in the housing market," the note said. Read more here.

The dollar was lately up another tenth of a cent at 81.28 US cents after earlier hitting its highest level since January. While much of this week's rally is attributable to weakness in the greenback, commentators claimed traders were betting that the Reserve Bank has finished the latest rate easing cycle.

"The RBA has lost control of the Australian dollar now and after having flagged the notion that the bank no longer has an inclination to ease monetary policy in Australia, FX traders are exploiting the premise that this week's Australian Federal Budget is not forcing the RBA to go back and cut rates," Rivkin CEO Scott Schuberg told Fairfax.

Asian markets were mixed. China's Shanghai Composite slipped 0.32%, Hong Kong's Hang Seng improved 0.21% and Japan's Nikkei fell 0.55%. Dow futures were recently up 10 points or less than 0.1%.

Crude oil futures shed 35 cents this morning to US$60.15 a barrel. Spot gold was $4.70 weaker at US$1,213.50 an ounce.


A downbeat morning on the broader market, but nothing that could not be anticipated after the XJO got ahead of itself yesterday. The mood yesterday arvo was too bullish for the 3.30pm Chinese data to dent the miners, but they are taking their medicine today. Trading: nothing to report that will bother Endless. Got a bounce out of APA and had to double down on VLA to get out with a profit. Subsistence stuff. Well done to those who got a quid out of MRF. I'll wait for the pullback. Well done on SRX, Mitta.