Market loses ground again
A long-awaited bounce in the spot iron ore price did little to comfort investors today and the Australian sharemarket lost ground for the ninth session out of ten.
Offshore markets reversed early weakness from dismal global manufacturing data last night but the S&P/ASX 200 index lost 11.9 points, or 0.22 per cent, to 5304.3 as miners failed to mount a rally and profit taking capped three of the major banks.
Spot iron ore climbed 1.1 per cent to $US80 a tonne yesterday but Dalian iron ore futures curbed rebound enthusiasm with a 1.3 per cent fall.
Underscoring the message from futures, steel rebar futures fell one per cent. Copper was flat at $US6665 a tonne and gold jumped $US10 to $US1194 an ounce.
Brent crude oil jumped 1.5 per cent to $US79.3 a barrel.
"This was attributed to speculation that OPEC may pare its production target at its meeting next week," National Australia Bank currency strategist Raiko Shareef said. "Even if that happens, we are sceptical that it will have a significant impact on prices."
Last night manufacturing PMI indices followed the weaker leads from Japan and China as German, French and US indices all lost ground in a sign of the global economy was losing momentum.
The Australian dollar rebounded US0.7¢ to US86.40¢ as the US dollar lost ground despite relatively better data.
The Philadelphia Fed index leapt to a 21 year and US existing home sales rose 1.5 per cent, but the PMI index surprised with a 1.2 point drop to 54.7 and consumer inflation was unchanged at an annual rate of 1.7 per cent, below the US Federal Reserve target.
In Tokyo the Nikkei index fell 0.5 per cent and the yen dropped after Finance Minister Taro Aso said the yen surge this month following the expanded stimulus plan had been too rapid.
The Shanghai composite index was up 0.6 per cent at the close of the ASX.
More to come…
