Quite clearly ASX market participants got too calm this morning, despite news of imminent Israeli retaliation, probably looking at the US futures being green. When US futures have turned red, ASX stepped up in losses. Maybe instos pulled the trigger and retailers followed.
You can never trust US futures.
I think a lot of people have lost awareness. A lot of inefficient pricing.
ASX worse day -2.1% in a while though the morning started rather benign.
ASX extends losses, Woolworths CEO clash weighs
Cecile Lefort
Australian shares were on track for their worst day since March last year, mirroring a sell-off on Wall Street, after much stronger than predicted US retail sales data dented hopes of interest rate cuts.
Heightened tensions in the Middle East also kept sentiment for risk assets in check, with the benchmark S&P/ASX 200 index down 2 per cent. All 11 sectors were in the red and the All Ords shed 0.9 per cent.
Property, consumer stocks, and mining sectors were the biggest casualties.
Much of the damage came after US retail sales rose more than forecast in March, showcasing resilient consumer demand and stoking speculation the Federal Reserve will keep rates high for longer.
Fed fund futures are fully priced for a rate reduction in September and have a total of 44 basis points of cuts this year, down from 150 basis points early in the year. The Australian dollar also skidded to a five-month low of US64.06¢.
Investors shrugged off better-than-expected data from China. The world’s second-largest economy expanded 5.3 per cent in the 12 months to March, well above forecasts of 4.6 per cent. China is the biggest customer of Australia’s iron ore.
Yet shares in mining giants slumped, tracking a sell-off in the iron ore price which was down 2.3 per cent in Singapore. Rio Tinto dropped 3.4 per cent and BHP was off 2.3 per cent.
Even gold explorers suffered despite prices of the precious metal near record highs. Gold Road Resources tumbling 5.5 per cent, followed by St Barbara off 3.5 per cent. Silver Lake was among the rare winners, albeit just with a 0.2 per cent gain.
Spot gold prices edged up 0.1 per cent to $US2,383.07, pulling closer to an all-time peak of $US2,431.29 on Friday. Fears of a region-wide war in the Middle East sent investors rushing to safe haven assets like gold.
The big Australian banks shaved off 2 per cent each.
------------
There is no safe haven in equities.
The better option is AUD Gold/Silver - because even if precious metals were to fall, the AUD fall would cushion it, offsetting that is. But now we have precious metals being the go to safe haven and a falling AUD, providing double whammy growth drivers for AUD Gold/Silver.
