Australian shares slumped this morning as a weekend of inconclusive European meetings spooked US futures and Asian markets.
At lunchtime the ASX 200 was down 77 points or 1.9% at 4071 as investors rotated out of cyclical stocks into defensives including gold (+0.3%) and telecoms (flat). Financials was the worst of the sectors, down 2.4% as Europe's refusal to hand Greece any more aid until it makes progress on its austerity plans once again raised the spectre of a sovereign default.
"People were hoping for some positive interaction between European finance ministers and [US Treasure Secretary Tim] Geithner resulting in a firm, positive response to Europe's debt crisis," Tim Schroeders of Pengana Capital in Melbourne told Bloomberg. "Instead, what they got was just greater uncertainty, and nothing was resolved."
US futures deteriorated with Asian markets this morning. Dow futures were recently down 152 points or 1.3%. Shanghai fell 1.27% and Hong Kong's Hang Seng 2.36%. Japan's Nikkei was closed for the first of two public holidays this week.
The dollar fell more than half a cent this morning during a general retreat from anything seen as a "risk asset". The Aussie was lately buying US$1.0255, down 0.5%.
Oil also fell sharply. Crude for October delivery fell $1.04 this morning to US$86.86 a barrel. Spot gold rallied $10 to US$1,822.50 an ounce.
The European pessimometer dips and down we go again. Feels like we've been on this roller-coaster for years now. Caught NGE near the lows this morning for a scalp and had a couple of dabs at CGF, one of my favourite intraday swingers.
