Morning traders.Market wrap: A sharp downturn in commodities and...

Morning traders.

Market wrap: A sharp downturn in commodities and losses among US and European equities have Australian shares pointed lower this morning.

The December SPI futures contract ended the night session 58 points or 1.4% weaker at 3998 as further signs of division among European policy-makers helped end Wall Street's three-day winning run and sent copper to a 14-month low.

US stocks began the night brightly as durable goods orders topped expectations, but rolled over as attention swung back to Europe's debt struggles. The S&P 500 lost 2.07% with all 10 industry groups losing ground, led by those most exposed to the global economy. The Dow fell 180 points or 1.61% and the Nasdaq lost 2.17%.

"The market is on pins and needles over the whole European debt problem," the head of equity trading at Thornburg Investment Management in the US told Bloomberg. "Every new rumour or little piece of news moves the market in one direction or the other a percent or two. It's frustrating!"

European shares tilted lower amid growing signs of conflict over how to tame the euro-zone's debt crisis as officials return to Athens tonight to continue their review of Greece's austerity measures. Britain's FTSE fell 1.44%, Germany's DAX 0.89% and France's CAC 0.92%.

Up to seven of the European Union's 17 members are said to be demanding that private lenders take a bigger haircut on a second bailout package for Greece, a demand said to be strongly resisted by the European Commission. The EC and Germany are also at odds over calls to increase a European bailout fund. On a brighter note, Finland's parliament approved changes to the European Financial Stability Facility that require the approval of all euro-zone members.

The Dow rallied more than 100 points in early trade after orders for capital goods had their biggest increase in three months during August. The report raised hopes that the manufacturing sector is weathering the latest economic downturn better than feared.

Australian miners fell back in US trade as the US dollar's first rise this week pressured dollar-denominated commodities. BHP fell 4.3%, Rio Tinto 4.6% and Alumina 1.6%.

Copper collapsed to its lowest level in 14 months as traders prepared for an increase in margin requirements at the London Metal Exchange and risk aversion gripped commodity markets ahead of tonight's vote in the German parliament on changes to the European bailout fund. In London, copper fell 6.9%, aluminium 1.9%, lead 2.8%, nickel 4%, tin 6% and zinc 3.3%. US copper was recently down 7.6%.

"Concern for global growth and bad charts have kind of thrown some water on the commodities bull market here," a manager at BB&T Wealth Management in the US told Bloomberg.

Precious metals resumed their decline following Tuesday's rally. Gold for December delivery fell $42 or 2.5% to US$1,610.50 an ounce. December silver eased $1.65 or 5.2% to US$29.89 an ounce.

Oil accelerated its losses alongside US equities. Crude for November delivery was recently off $3.76 or 4.4% at US$80.69 a barrel.

TRADING THEMES TODAY

TURNING LOWER: Profit-taking last night after three days of gains in the US was not unexpected, especially with uncertainty about tonight's vote in the German parliament (see below). What might not have been anticipated was the scale of the falls among commodities, where copper copped a whacking as traders exited ahead of hikes in margin requirements in London. Our miners are likely to come under heavy pressure this morning, but it will be interesting to see if the rest of the market shows any strength. This week's bounce felt more substantial than recent counter-trend rallies but the medium-term trend still appears negative.

ALL EYES AGAIN ON EUROPE: A big night lies ahead in the euro-zone, with the German parliament to vote tonight on increasing the European bailout fund and a review team returning to Greece to assess whether the government has done enough to earn the next tranche of bailout funds. (Without those funds, the government says it will run out of money by the middle of next month.) The German parliament appears likely to approve changes to the European Financial Stability Facility rescue fund, but German Chancellor Merkel's government is out of favour with voters wearied of being tapped for bailouts, so success is not guaranteed.

ECONOMIC NEWS: A slow week for domestic news continues with nothing scheduled today. Japanese retail sales are due at 9.50 am AEST. Highlights tonight in the US include weekly unemployment claims, pending home sales, GDP and natural gas storage. However, the night's biggest interest probably rests in a vote in the German parliament (see above).

Good luck to all.