A collapse in consumer confidence helped push the Australian shares to a five-week low and a possible third loss in four sessions.
At lunchtime the ASX 200 was trading 13 points or 0.25% in the red at 5406 but well above the mid-morning low of 5372. The defensive telecoms +0.7%, health +0.2% and utilities +0.1% were the only sectors to advance. Spearheading falls were the metals & mining sector -1.2%, materials -1.1% and the Small Ords -0.7%.
"Markets are experiencing a fresh bout of risk aversion," Matthew Sherwood, head of investment markets research at Perpetual, told Bloomberg. "There was scant new regional data on the economic and earnings front [overnight], which means justifying current valuations is the main concern for investors."
The consumer discretionary sector slid 0.5% after data showed consumer confidence dived 6.8% this month to a two-year low ahead of the federal budget. The MI-WBC index reading for May was 92.9, meaning pessimists outnumbered optimists.
A 0.7% increase in wages over the first quarter left the annual growth rate at 2.6%, below the 2.9% headline inflation rate which suggests that wages are not keeping pace with living costs. Internet job vacancies declined 0.2% in April.
China's Shanghai Composite rallied 0.24%, Hong Kong's Hang Seng was little changed at +0.02% and Japan's Nikkei fell 0.29%. Dow futures were recently up five points or less than 0.1%.
Spot gold rose 20 cents this morning to US$1,294.80 an ounce. The dollar was buying 92.4 US cents.
Definite buying interest in the XJO below 5400 evidenced in the last two sessions, despite gloomy economic news. Can't say the consumer confidence reading was a surprise - it put the retailers in the firing line, which gave me entries in KMD and FXJ. Out of both now. LNG got the session off with a bang - love that sort of wild sell-off because the rebound tends to be just as violent.
