Shares skidded to a two-week low this morning as the latest dose of euro-phobia sent Asian shares lower for a fourth day.
At lunchtime the ASX 200 was down 74 points or nearly 1.8% at 4183 as all sectors lost ground. The falls were largest among resource stocks as overnight falls in oil and metals took their toll. The metals & mining sector eased 2.5%, gold 2.3% and energy 1.5%. Financials were 2.1% weaker following an overnight global retreat from the sector as European bond yields hovered in dangerous territory.
"It's fear building on fear at the moment," CMC Markets sales trader Ben Taylor told Fairfax. "There's a contagion of fear. People are thinking that now the problems are moving from the periphery of Europe to the key economies."
Asian markets continued this week's downturn. Japan's Nikkei fell 1.1%, Shanghai 0.89% and Hong Kong's Hang Seng 2.08%. Dow futures were recently off 14 points or about 0.1%.
The dollar dropped below parity with the US dollar overnight amid speculation about the impact of slower growth in China on the Australian economy. The dollar was recently buying 99.97 US cents.
"We see the Australian dollar falling back below parity to around 93 US cents by mid-2012," CIBC World Markets economist Andrew Grantham told Fairfax. "Although structural weaknesses in the US dollar and the potential for monetary stimulus in China - if growth eases too far - should help the Aussie recover some of this ground by end-2012."
Crude oil futures dropped another 65 cents this morning to US$98.31 a barrel. Spot gold was recently virtually unchanged, ahead 10 cents at US$1,719.90 an ounce.
Tough morning. Hardly a hint of a bounce in the index, which is ominous. I loaded up in mid-caps at their initial lows, missed the bounces I wanted to sell into and then watched several go lower and the rest twiddle their thumbs. Got PRU away for a profit but still holding a heap of gone-nowheres, including SVW, BLD, MTS, ILU and FER. Someone give them a poke with a stick.
