‘It’s going to be a fairly bloody day’ for ASX
UPDATE: The Australian dollar has fallen to a six-and-a-half-year low, losing more ground on the back of renewed concerns about the slowing Chinese economy.
At 12pm (AEST) on Tuesday, the currency was trading at 69.59 US cents, down from 70.33 cents on Monday.
During the morning, it fell as low as 69.46 US cents, its weakest level since April 2009.
Profits from China’s industrial sector fell 8.8 per cent in August, weighed down by that month’s currency devaluation, weak demand and plunging share prices.
Earlier in the day, Australia’s share market had slumped in early trade, joining the overnight retreat by US and European equities on deepened worries about China’s economy.
The resources sector was the hardest hit, taking cues from Monday’s rout for the sector in the European markets, while energy and banking stocks were also trading weaker.
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The benchmark S&P/ASX200 index was down 2.8 per cent after the first half-hour of trade.
“It’s going to be a fairly bloody day,” Rivkin Securities chief executive Scott Schuberg said.
“Fundamentals are not really at play, we are really focused on technical levels today.”
Overnight, US stocks fell sharply after poor Chinese industrial profits data, with the Dow Jones Industrial Average ending 1.9 per cent lower.
The weak Chinese data hit prices of key commodities such as oil and copper, as well as shares of petroleum-linked companies.
That trend seemed to carry on in the local market.
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Mining giant BHP Billiton was down $1.35 or 5.8 per cent, at $21.80, while rival Rio Tinto lost $2.55, or 5.3 per cent, at $46.20. Fortescue dipped 8.0 cents to $1.70.
Origin Energy shares slumped 56 cents, or 8.2 per cent, to $6.25; Santos shed 31 cents, or 6.6 per cent, to $4.40; while Woodside Petroleum was down $1.28 at $28.63.
Among the big four banks, Commonwealth Bank slid $1.33 to $71.35, Westpac slipped 72 cents to $29.52, NAB lost 67 cents to $29.63 and ANZ declined 77 cents at $26.63.
Kathmandu shares were expected to trade lower after the outdoor goods retailer’s full year profit plummeted 51.7 per cent on aggressive discounting and weaker-than-expected sales.
“The forward price earnings valuation for the market is looking relatively mild, and it’s possible selling has been exhausted on the ASX 200,” Schuberg said.
He expected some buying to come in later in the session.
At 1040 AEST on Tuesday, the benchmark S&P/ASX200 index was down 142.8 points, or 2.79 per cent, at 4,971 points.
The broader All Ordinaries index was down 134.9 points, or 2.62 per cent, at 5,010.20 points.
The December share price index futures contract was down 2.94 per cent at 4,956 points, with 17,167 contracts traded.
National turnover was 371.565 million securities worth $871.789 million.
– AAP
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