ASX closes down on Ukraine crisis
Russia's annexing of Ukraine's Crimea region and weak Chinese data knocked the Australian sharemarket sharply lower at the open but bargain hunters swooped in as Chinese stocks rallied, paring early losses.
The S&P/ASX 200 index fell 1.1 per cent, with miners leading the fall, but it bounced to close 20.5 points, or 0.38 per cent, down at 5384.3 as investors shrugged off broader geopolitical risks and another batch of mixed, but mostly soft, US data on Friday.
The Australian dollar fell US0.6� to a low of US88.90� before bouncing to US89.10� while government 10-year yields fell 4.6 points to a three-month low of 3.973 per cent despite a tentative bounce in the AiG performance of manufacturing index to 48.6 points from 46.7.
Gold jumped $US16 to $US1342 an ounce and Brent crude oil climbed 1.5 per cent to $US110.70 a barrel on concerns of a disruption of gas supply to Europe from the Russian pipeline which passes through Ukraine.
Concern over Chinese growth momentum were fanned by a drop in the official manufacturing PMI index to stall-speed rate of 50.2 points, slightly better than forecast, although the non-manufacturing index bounced 3 points to 55.
The Shanghai composite index was up 0.8 per cent at the close of the ASX as telcos and consumer-staple companies rallied on speculation lawmakers would announce measures to reform state- owned companies.
HSBC China economist Hongbin Qu said it was clear that the risks to GDP growth were tilting to the downside and policy fine-tuning measures were needed to stabilise market expectations.
In Tokyo the Nikkei index was off 2 per cent as the yen rallied, knocking exporters.
On Friday US December-quarter was revised down to 2.6 per cent, and pending home sales increased just 0.1 per cent, well short of forecasts, while the Chicago PMI index climbed 59.8 points, easily beating forecasts.
"The US GDP revision was on the low side and raises questions about the momentum into Q1 but as most analysts are confused about the full sum of weather effects, we may be waiting for clean March data for some guidance," National Australia Bank currency strategist Emma Lawson said.
More to come…
