An accelerating sell-off in resource stocks dragged the ASX faded towards a likely sixth loss from seven sessions.
At 1pm EST the ASX 200 was 10 points or 0.2% weaker at 5729 after earlier sliding to its lowest point in more than two weeks. The energy and materials sectors marked their lowest points in at least six weeks, falling 1.7% and 0.4%, respectively as the so-called 'Trump trade' continued to unwind. Both sectors have outperformed since the November US presidential election.
Also weak this morning: consumer staples -0.8%, gold -0.6% and industrials -0.4%. The consumer discretionary sector rallied 1.5%, IT 0.6% and health 0.5%.
"US shares may have found buyers late on Friday but the bond market is speaking volumes, with the 10yr US Treasury moving progressively lower to a four month low," IG analyst Gary Burton told Fairfax. "One would be wise to follow fixed income over equities every time, and the buying we are seeing suggests some pulling back on the Trump trade. Gold has reached its highest in 3-1/2 months as the greenback fell to a one-week low after the new US Treasury chief poured cold water on the 'Trumpflation trade' that had boosted the greenback this year."
China's Shanghai Composite edged up 0.16%, while Hong Kong's Hang Seng fell 1% and Japan's Nikkei 1.48%. Dow futures were recently dead flat.
Crude oil futures drifted two cents or 0.04% lower this morning to US$53.97 a barrel. Gold futures improved 60 cents or 0.05% to US$1,258.90 an ounce. The dollar was buying 76.79 US cents.
The air just keeps seeping out of the ASX like a slow leak. Give me a short, sharp retreat any idea. Elsewhere, ARL must be one of the trades of the year for those who got on early and held on. Looks to be going parabolic now, but what a ride. Trading: scored in CZN and DTI. Would like a few more.
