Australian stocks reached lunchtime little changed for a fourth session as improved housing and car sales data was offset by pressure on commodities as the US dollar rallied.
At 1pm the ASX 200 was ahead one point or less than 0.1% at 4487 as the market continued to consolidate near last week's 14-month high. Resource stocks and small caps saw the biggest declines as oil, gold and copper retreated this morning. The gold sector dropped 1.9%, materials 0.9% and the Small Ordinaries 0.7%. Telecoms +0.8%, consumer staples +0.5% and financials +0.4% were among the leading gains.
The declines in resource stocks came despite strong Chinese trade data released over the weekend that showed improvements in exports and iron ore imports.
"Surprisingly, the materials are one of the weaker sectors," IG Markets analyst Cameron Peacock told Fairfax. "I would have thought the materials would have got a bit of a boost from the Chinese numbers. The Chinese surplus was stronger than expected and Chinese exports were stronger than expected."
Currency and commodity movements hinted at caution ahead of a big week of US corporate earnings results. The US dollar index, which measures the greenback against a basket of currencies, was lately up 0.3%. The Aussie was down nearly half a cent, buying $US1.0231.
Crude oil futures fell 44 cents to US$91.20 a barrel. Spot gold softened $9.80 at US$1,744.50 an ounce. December copper was down two cents or 0.5% at US$3.68 a pound.
Asian markets were mixed as Chinese inflation data came in roughly in line with expectations. Consumer prices rose 1.9% year-on-year and producer prices dropped 3.6%. Shanghai eased 0.18%, Hong Kong's Hang Seng lost 0.05% and Japan's Nikkei rallied 0.09%. Dow futures were recently down seven points or less than 0.1%.
Australian shares pulled away from their morning lows after 11.30am EST reports showed record sales of new vehicles and a solid improvement in home loans. Read more here.And here.
A "risk off" session in most markets despite the Chinese data. Good to see our market hold its ground, even if it's disappointing we didn't get more of a bump from those Chinese figures. I stuck to buying pullbacks this morning and had a win in PRR, partial win in MOY (still open) and was stupidly shaken out of BKP for brokerage. WPG from last week looks like it's turning up on low volume. Report card: B-.
