Skip to main content

Fall in Australian stocks, sharp decline in commodity sector



Australian Daily Market Roundup

As many of you would be aware, a fall in the Shanghai Stock Market of 8.8% yesterday caused sizeable losses on other markets last night. The major barometer of US stocks, the S&P 500, was down 3.4%, while the headline Dow Jones Industrial Averege was down 3.3%.
Our sharemarket, however, largely took the ruffled feathers of overseas markets in its stride.

The key benchmark, the S&P/ASX 200, fell almost 210 points at the open, which was the largest fall in this bull market, but bounced back almost 50 points to finish down 161 points. That's 2.7%. The solid bounce, and the notable outperformance against other key markets, gives us confidence in the market.

The market has run very hard over the last five months, and is up more than 1,000 points. It is natural for pullbacks to occur in strong markets like this.

If you have a look at any chart of our market, you’ll see periods of losses.The last period of sharp selling occurred in May 2006, but there was also heavy selling in March and October 2005. On each occasion, the market bounced back strongly.

. Short-term trades are probably best closed out, but for longer term trades, the best reaction is usually to observe the fallout over the rest of the day and the coming sessions.
We decided to exit our Core Portfolio for safety. Now, they might well bounce back over the next couple of days, but trading decisions need to made on probabilities.

Today's action certainly showed that there is potential for edgy investors to take profits. This is typical after strong runs, because investors and traders want to lock in their profits. Hardest hit today were stocks in which the best profits had been made recently: Aquarius Platinum down 9.8%, Zinifex down 6.6%, Macquarie losing 6.5% and BHP fell 6.0%.
Across the market, 1275 stock lost ground, while only 161 ended in the black. And 228 finished unchanged.
There's more about the overall market and the general concept of corrections in today's lesson.

MArket Leaders

Unsurprisingly, They were not many leaders today. The best performing stocks today tended to be defensive stocks.
The best performer in the top 200 was Galileo Shopping (GSA), which added 2.4% to close at $1.30, after releasing a US joint venture proposal.
Lion Selection (LSG) also made it to the leaders’ board, gaining more than 2% from yesterday’s closing price.
Despite a not-so-good start, Woolworths (WOW) managed to close up 1.7% at $27.20.
Duet Group (DUE) also put a bad start behind it to close up 1.7% for the day.
In fashion with the other leaders today, Fleetwood Corp (FWD) started off badly but regained to close in the positive for the day. FWD closed up 1.3%.

Losers

McGuigan Simeon (MGW) was the worst performer on the market today, falling 12.5% to $3.15, after announcing a share placement at $3.10 to fund the purchase of a wine business.
Miners filled many of the next places. Aquarius Platinum (AQP) suffered a massive gap down today, opening at $34.90. The stock fell a little further during the day to close down almost 10%.
Zinifex (ZFX) was another of the badly-hit miners, drifting down 6.6%, or $1.18, to close the day at $16.72.
Bradken (BKN) isn’t a miner, but its fortunes are closely tied to the mining sector. BKN closed flat on its opening price, but still lost 9.2% from yesterday’s closing price.
Novogen’s (NRT) first-half results didn’t impress the market, closing the day down 8.3% at $2.55.

Commodities

Crude oil recovered from a 2% drop in last night's regular trading session, but tanked to as low as US$60.06 a barrel in electronic trading.
Gold gave back what it gained over the past three trading sessions on concerns that the demand for commodities from China might weaken. Pretty much like crude, gold fell a touch in regular trading session, but dived to US$660 an ounce in electronic trading. It has it has bounced strongly in Asian trading today.
Elsewhere in metals, nickel gained 0.9%, but all other metals all finished in negative territory.


Overseas Markets

Global equity markets were slaughtered yesterday and last night, precipitated by concerns that tighter credit conditions in China and Japan might dampen global growth.
The carnage began with the Shanghai Composite Index in China, which tanked 9% yesterday. More than 900 stocks finished 10% lower.
The sell-off then spread to other markets. The UK FTSE 100 fell 1.5% during early trading, but tanked even more after US markets opened, and eventually lost 149 points, to finish at 6,286.
The US markets had their worst one-day drop since 2001. The Dow fell more than 400 points, or 3.3%, the Nasdaq dropped nearly 4% and the S&P 500 lost 3.5%.
In the meantime, trading volumes hit record levels on the New York Stock Exchange, with more than 2.3 billion shares changing hands.
In Asia today, the Shanghai index bounced strongly from yesterday's sharp drop, recovering nearly 3.5% in late trading. The Nikkei dived 516 points today to finish at 17,604. The Hang Seng was even worse, tanking 580 points in morning trading before bouncing back nearly 180 points from today's low.a

Popular posts from this blog

Best Australian stock forums online ( finance forums)

Many traders and investors use forums to share ideas, learn from the more experienced, or simply to stave off boredom during long hours at the computer. Here we list the known universe of forums, complete with costs, member numbers, extra benefits and popular forum topics. Please post a message on Your 2 Cents if your favourite forum isn't listed here, or if you feel that there's more to add about the day-to-day goings on in your online community.Forum
Cost
Stock comps
Forum areas
Comments
AussieStockForums.comFreeASX by share code, General, Beginners, Derivatives, Commodities, International, Strategies/SystemsEasy to use, independent forum. Aussie Stock Forums has a group of very active and knowledgeable traders. Private messaging available. Australian forum.
Chimes in ExileFreeASX stocks, fundamental analysis, technical analysis, commodities, economics, investment tools The forum has a small group of regular contributors that form a genuine community of investor…

The diggers and dealers forum meet 2011

The diggers and dealers forum has just begun August 1. Its a three day annual event happening every year  at the WA country town of kalgoorlie.2011 Diggers & Dealers forumBig name brokers  keenly watching the event will be MacquarieDeutsche BankBell PotterGoldman SachsRBS MorgansEvans & PartnersHartleysBlack Swan Euroz.Well most other websites will give you the  finer details of the annual meet and greet that happens at kalgoorlie , so we will just stick with the bare minimum of details  and focus on the more enjoyable bits  of information that the dealers require to strike a good deal while in town.Bare detailsWebsite : Diggers & DealersEvents : Program and scheduleWatering holes and entertainment at Diggers and dealers forumPubs , clubs  and skimpy (barmaids) culture in kalgoorlie . There are about 25 pubs in Kalgoorlie-Boulder area and for a city that stretches just 67sq km the number of pubs makes for  a good choice on drinking holesand entertainmentExchange Hotel ( Pa…

List of Australian blue chip stocks

Australian shares gained 0.6 percent on Wednesday led by blue chip miners and financials on strong resource price


The biggest Blur chip stocks traded on the ASX, in terms of their market capitalisation, include:
BHP BillitonCommonwealth Bank of AustraliaTelstra CorporationRio TintoNational Australia BankAustralia and New Zealand Banking GroupRio tintoWestpac
The only stock to do worse than the S&P/ASX 200 is Harvey Norman Holdings Ltd [ASX: HVN]. Even so, it’s a better-than-the-bank 8.3% gain. The others have done much better: Qantas [ASX: QAN] up 36.1%; JB Hi-Fi [ASX: JBH] up 20.5%; Toll Holdings [ASX: TOL] up 25.3%; and Myer Holdings [ASX: MYR] up 37.1%. The benchmark S&P/ASX 200 index rose 27.1 points to trade at 4,977.3 by 2310 GMT. It fell 0.8 percent on Tuesday, its lowest close since February 7.