The S&P/ASX 200 Index closed down 82 points or 2% lower to 4051 points today, confirming yesterday’s falls through significant support at 4150, with the next target at 3850-3900 points. The market reacted to poor PMI numbers from China as the falls on overnight markets were modest. The S&P500 lost 0.4% whilst the UK FTSE only lost 0.3%, the German DAX fell over 1%.
In after hours trading, the Australian futures are steady, whilst the Euro markets are pointing to 1 to 1.5% losses as are the US futures. The Euro (EUR/USD) is decelerating as it hovers around the 1.35 mark, possibly building on a bullish short term breakout:
Asian markets had a mixed day, with Japan’s Nikkei 225 closed for a public holiday, the Hang Seng lost almost 2% to 17888 points and the Shanghai Composite currently down 16 points or 0.7% to 2395 points.
In other risk assets, the AUD continues to correct below parity against the USD and is currently at 97.70 cents, likely on the way to support at 95.20:
WTI crude lost 1.4% and is now at $96.65 USD a barrel, whilst Gold climbed again during the Asian session rebounding back above $1700 USD an ounce, currently at $1710 per ounce waiting for the London session. In Australian dollars however, gold is currently trading at $1747 AUD an ounce.
Movers and Shakers
An red day on the board of the ASX, with all sectors taking significant hits. The worst was predictably materials, nearly 3%, followed by the financials losing over 2% – not a good day for the ASX8.
Obviously, all the banks were sold off, with ANZ down 2.2%, Commonwealth (CBA) down 2.4% and failing support at $47.50: the aborted covered bond raising and funding costs rising is not looking good for the biggest residential mortgage trust in Australia.
National Australia Bank (NAB) too is on its way down, losing over 3% after failing support at $24 on Friday, with $21 a share not far away, whilst Westpac (WBC) lost 2.6% completing the rout of the major financials as it heads back to its July 2009 price
Macquarie (MQG) fell over 2% whilst healthcare leader Cochlear (COH) was the exception on a bad day, gaining 0.3%. Its “twin” CSL did not fare as well, and as I suggested yesterday it has stalled at just over $31 a share as it meets resistance at its long term moving average. A lower AUD and higher EUR should prove profitable for CSL:
Telstra (TLS) fell with the market, losing 1.3% but still remains in a solid uptrend.
To the resources, and BHP Billiton (BHP) and its “twin” Rio Tinto (RIO) both lost over 3% as the market considers a hard landing in China a greater possibility – right at the same time that engineering construction is booming…..
Meanwhile gold miner Newcrest Mining (NCM) lost 1.57%, Fortescue (FMG) finally reverted to mean and had a splendid rout for the day traders, falling over 6% alongside its bigger brothers.
Rounding out the ASX8, Woodside Petroleum (WPL) was another standout and gained 0.7% and is slowly building with support at $35 a share, as oil prices remain somewhat resilient.