The share market slid towards a fourth straight losing week after hopes for fresh economic stimulus in Europe were dashed overnight.
At 1pm EST the ASX 200 was 42 points or 0.8% lower at 5343 after earlier touching a fresh eight-week low at 5332. This year's global rally has stuttered over the last month as traders question whether central banks have much ammo left to tackle persistently weak inflation. Overnight, the European Central Bank left its key rate at a record low and gave no hint of further measures to stimulate the economy.
“The ECB, and many central banks now, look to be taking more of a measured approach to additional policy easing compared with the not-too-distant past,” Philip Borkin, senior economist at ANZ Bank New Zealand, told Bloomberg. “This is only natural, of course, as monetary policy delves further into the unknown.”
On the ASX, gains in energy +1.5%, metals & mining +1% and materials +0.7% were dwarfed by declines in gold -2.4%, health -1.4% and financials -1.1%. Elsewhere, China's Shanghai Composite shed 0.08%, Hong Kong's Hang Seng advanced 0.69% and Japan's Nikkei gave up 0.19%. Dow futures were recently down eight points or 0.04%.
Crude oil futures retreated 39 cents or 0.82% this morning to US$47.23 a barrel. Gold futures were $1.60 or 0.13% higher at US$1,343.20 an ounce. The dollar was buying 76.39 US cents.
The grind lower continues, like air seeping out of a tyre. I prefer retraces to be sharp, short and ugly, but volatility is strangely missing from world markets at present. The market is taking the stairs in both directions. What happened to old-fashioned fear and greed? I'd like to see XJO test 5300 next week, then bounce hard. Trading: took a modest pip out of DRM off the low and opened a small speculator in BSL on suspicion today's post-dividend sell-off is marginally overdone.
