After another day of “risk off” in Asian markets, the S&P/ASX 200 Index falling sharply at the open, slumping by midday and recovering slightly, but still finishing down 50 points or 1.2% to 4139:
It seems likely, save a Santa Rally, that the market will continue to retrace back to the 4000 support level in the short term, as it follows other undollar risk assets. In after hours trading, the SPI futures have fallen a further 15 points and are trading at 4125 before the European open.
Japan’s Nikkei 225 was down 1.3% to 8408 points, on the back of sliding manufacturing figures. The volatile Hang Seng was down 1.8% to 18014 points, mirroring the Shanghai Composite which continues its downtrend after breaching support earlier this week, currently down 1.5% or 35 points to 2193 points, a level not seen since March 2009:
Europe was broadly sold off last night with the UK FTSE finally succumbing, falling over 2% to 5366 points, whilst the German DAX was better off, down 1.75% to 5675 points, falling below short term support, with the next target the 5400-5500 point area, a breach of which is very bearish as it washes out the accumulation of the past 3 months:
The Euro (EUR/USD) fell below 1.30 for the first time since January and seems on its way to 1.20, currently trading at 1.2982. Reflecting this the USD Index continues its breakout as I explained in the post on Gold this morning.
The US markets weren’t as bad, but still all fell over 1%, with the S&P500 closing down 1.1% to 1211 points, with a probable short term downtrend target at 1150 points. A fall below that level would complete a reversal head and shoulders pattern and see a retracement to 1030 points or even further.
The AUD finally fell below parity with USD, and even below 99 cents, currently trading at 98.72 cents, whilst Australian goverment 10 year bond yields fall to record low of 3.74%. Do not confuse this with “very very low soveriegn risk” like some who should know better.
WTI crude remains well below $100 a barrel, rising ever so slightly today and at $95.15 USD a barrel exactly.
Gold was the big loser last night, as I explained in my special post this morning, falling some 5% and falling again in the Asian session, off $17 or 1% to $1569 USD an ounce. In Australian dollars, the shiny metal also fell and is now at $1591AUD an ounce.
Movers and Shakers
It was a red day on the local bourse, with only the IT and REIT sectors putting on any runs, the biggest losers the usual suspects, energy materials and financials.
I was surprised the financials were not sold off more, given the downgrade by Merrill Lynch last night.
ANZ was down just under 1%, where it remains in a trading range between $19 and $22 per share, Commonwealth (CBA) was off 1.5%, refusing to go above $50 a share (and probably only worth 2/3rds that, at best), National Australia Bank (NAB) also down 1.5% whilst Westpac (WBC) the worst down 1.6%
Macquarie (MQG) was actually up for the day surprisingly, almost 1%, whilst healthcare favourite Cochlear (COH) finished flat after rising earlier on an upgrade from Macquarie and remains above $56 per share.
Its “twin” CSL slipped 0.4% but remains in a solid uptrend, whilst Telstra (TLS) fell similarly, and also remains in a good trend after being slightly overbought recently.
To the resources, with BHP Billiton (BHP) dropping almost 2% as commodity markets were routed (rooted?) overnight, although it had strong intra-day support, the “Big Australian (owned by non-Australians)” is fast completing a descending triangle bearish pattern, with short term support at $34 a share:
Its “twin” Rio Tinto (RIO) was worse off, falling nearly 3% for the day alongside a similarly affected Newcrest Mining (NCM) which continued its losses, reflecting the price in gold.
Rounding out the ASX8, Fortescue (FMG) also saw losses above 3% whilst Woodside Petroleum (WPL) fell 1.7% as it too approaches its pre-QE2 lows. It’s like $600 billion in money printing never happened….
Defensive stocks Wesfarmers (WES) and Woolworths (WOW) were basically unchanged, down only a few cents a share or less than a tenth of a percent.
We await another volatile night on the markets.