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Stock Market Horor Continues in Australia

The Australian market is having a horror day - down 288 or down 6.7% - on the back of the heavy falls on Wall Street overnight. We are fairing much worse than the 180 point fall predicted by the SFE Futures this morning. It’s a sea of red. 202 stock in the All Ords have hit a fresh yearly low today.

The Dow was down 678. Up 190 at best early in the session.

Energy and Resources down the most –10.8% and 8.3% respectively. Financials down 7.4%. Property down 7.3%. Industrials down 7.5%. Major banks down between 6%- 8%. St. George Bank down 10%. Macquarie Group down 11%.

  • Both BHP and RIO down in ADR form overnight, 6.39% and 7.12% respectively.
  • Metals all up – Zinc up 4.7%, Aluminium up 2.22% and Copper 1.49%. Nickel up 1.66%.
  • Oil price down $2.44 close to a new 12 month low of $86.50 despite talk that OPEC would cut output to pump up prices.
  • Gold down $20 to $886.50
  • US Bonds down with the 10 year yield up to 3.75%.

The sell-off in iron ore stocks is acute on further broker downgrades to future iron ore price assumptions. Fortescue Metals getting caneed - down 15.5%. All the metal stocks tanking despite the higher metal prices overnight.

 

IRON ORE PRICE DOWNGRADES

- Patersons and a few other brokers taking on board the Mt Gibson news yesterday and downgrading iron ore price expectations as some Chinese clients delay iron ore shipments and some can’t pay for them.

We have seen three brokers downgrade iron ore price expectation for this year so far – UBS have moved to down 15%, Goldman Sachs JB Were moved from +15% to excepting a roll-over of current prices and Patersons expecting minus 20%. Other brokers still expecting contracts to be up 30% to flat prices.

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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.