A rout in energy stocks helped hand the Australian share market its heaviest loss in seven weeks after OPEC dashed hopes of a cut to oil production targets.
At lunchtime the ASX 200 was 71 points or 1.3% in the red at 5330, the index's largest intraday decline since a 108-point belting on October 10. The energy sector crashed 6.7% to its lowest level in two years after oil fell below US$70 for the first time in four and a half years. West Texas Intermediate crude for January delivery was lately down $4.97 or 6.7% at US$68.73 a barrel. A meeting of the Organization of the Petroleum Exporting Countries ended last night without any change to members' production quotas. Read more here.
Panic in the oil sector appeared to infect the broader market, with gold stocks falling 2.1%, metals & mining 2% and materials 1.9%. Property trusts was the only sector to improve, rising 0.1%.
US futures were positive ahead of the resumption of trade tonight for a holiday-shortened session following Thanksgiving. Dow futures were recently up 15 points or 0.1%. China's Shanghai Composite gained 0.34% this morning, Hong Kong's Hang Seng slipped 0.06% and Japan's Nikkei added 0.99%.
Spot gold weakened $4.50 this morning to US$1,185.90 an ounce. The dollar was buying 85.18 US cents.
Oh my aching melon. I could have done with a more sedate market this morning. Instead, there were big waves crashing through the market and alarm bells going off left,right and centre. Been a long time since the likes of STO, AWE, WOR and OSH have taken this sort of pasting. The selling appears overdone in some cases, considering the OPEC decision was hardly a surprise. It's not impossible that oil will bounce from here, at least temporarily, once the Americans are back at their desks tonight. I traded morning bounces in DLS, SUN, DMP and SXY. All fine there, but I also took a decent chunk of LNR, which could use some improvement. It appears the smart money thinks the US shale oil industry is going out of business. The market always over-reacts and then upon reflection, corrects itself.
