UPDATED: The Australian share market has got off to a weak start, reversing some of the gains from the previous two sessions, as traders take cues from a sharp decline on Wall Street overnight.
The weak trend was apparent across the board, with all sectors in the red, but was particularly conspicuous in banking and energy stocks which had led the previous sessions’ gains.
“The volatility in global equities appears to remain firmly in place. Obviously, the uncertainty about Federal Reserve (rates) and China hasn’t gone anywhere,” said optionsXpress market analyst Ben Le Brun.
US stocks finished sharply lower overnight, with the Dow Jones Industrial Average down 239.11 points, as an early rally fizzled and Apple shares dropped after unveiling a suite of upgraded products.
Locally, banking stocks, which have led gains this week, were among the worst hit, each down more than two per cent. Commonwealth Bank fell $1.18 to $75.54, Westpac lost 79 cents to $31.02, National Australia Bank slipped 67 cents to $30.60, and ANZ declined 66 cents to $27.88.
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Energy stocks, which had previously rocketed on growing speculation about merger and acquisition activity in the sector, were also hit hard.
Woodside Petroleum, which has made a bid for Oil Search, was down $1.0 to $28.90, while the target slipped 20 cents to $7.65. Santos lost 21 cents to $4.46.
Shares in Sigma Pharmaceuticals, which has posted a 23 per cent lift in its underlying half year profit, were trading 0.5 cents lower at 75.5 cents.
“We have got a number of data points to watch out for today, so if these are better than expected, it is possible there may be a catalyst for a mid-session reversal,” Le Brun said.
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Meanwhile, Tokyo shares fell more than three per cent at the opening after their biggest one-day jump since 2008.
The Nikkei-225 index at Tokyo Stock Exchange lost 3.21 per cent, or 602.86 points, to 18,167.65 in the first minutes of trading.
Tokyo stocks plummeted after the bourse rocketed 7.71 per cent Wednesday, leading an Asian equities rally as investors scooped up shares on the cheap, while a weak yen and hopes that China’s wild market volatility was ending also boosted buying.
But they lost their upward momentum after US stocks finished sharply lower Wednesday as concerns turned to the possibility that the Federal Reserve will raise interest rates next week.
“Markets will remain volatile until the Fed meeting next week,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors, told Bloomberg News.
“Investors are again focusing on the potential US interest-rate increase and how it would impact emerging markets.”
In Tokyo forex trade, the dollar was weaker at Y120.19, compared with Y120.54 in New York.
The euro was $US1.1236 and Y135.13, compared with $US1.1205 and Y135.05.
– Agencies
This article was first published as “Confidence returns to Asian markets”
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