Australian shares this morning erased yesterday's gains as Asian markets declined following disappointing Japanese trade data and a downgrade to China's growth outlook.
At lunchtime the ASX 200 was down 43 points or 1.1% at 4077 but well off the morning low of 4067. All sectors lost ground, led by gold -1.8%, metals & mining -1.6%, industrials -1.6% and materials -1.4%. Small caps once again fared worse than blue chips, with the Small Ords down 1.3% versus a 1% decline in the S&P/ASX 20.
US futures reflected a negative morning on Asian markets and a 13% dive in shares in Dell in after-market trade after a disappointing profit report this morning. Dow futures were recently down 35 points or 0.3%.
Japan's Nikkei dropped 1.21% after the nation's trade deficit blew out more than expected and Fitch cut its sovereign credit rating. Shanghai fell 0.11% and Hong Kong's Hang Seng lost 1.51% after the World Bank cut its growth forecast for China.
The dollar plumbed a six-month low as forex traders favoured the perceived security of the US dollar over other currencies. The Aussie was lately buying 97.76 US cents.
Spot gold sagged another $6.50 this morning to US$1,561 an ounce. Crude oil futures were unchanged at US$91.45 a barrel.
This week's relief rally looks flimsy after this morning's action. Been a bit of buying at the lows, but not enough to suggest Friday's plunge marked a line in the sand. Hmmm... Anything is possible this afternoon but it would take a strong recovery to inspire confidence. I stuck to trying to find bounces after the dust had settled. Success in ALK and SFR, less in MTS. Missed a few more this morning that didn't quite give the desired margin of safety.
