So will another fall in the global iron ore spot price under $US53 for the first time be enough to offset the very positive lead from Wall Street and European markets overnight which was totally at odds with yesterday’s nervy 1.3% slide in the local market?
The iron ore spot price fell 0.9% to at $US52.69 a tonne overnight, gold prices dropped sharply, while oil dipped – the very factors from trading last Friday which crunched our market on Monday in a 74 point fall.
Leading the market lower were the big banks which were all weak yesterday. But a rise in the US dollar overnight (which helped gold and oil lower) and a sharp one US cents drop in the value of the Aussie currency to around 76.40, will help bolster local sentiment.
The local market should open up 50 points, if overnight trading in the share futures contract is any guide.
Wall Street’s big rise overnight was the second in a row (and Friday night’s smaller gains were ignored by our market yesterday).
Comments from China’s central-bank chief about how there was room to help the weakening economy helped push the Chinese market up 2.6% to a seven year high. They also helped markets elsewhere in Asia and Europe, and added to the bullish tone on Wall Street thanks to a string of deal announcements.
The S&P 500 closed up 25.22 points, or 1.2%, to 2,086.24. Energy stocks were the biggest winner, with the sector rising 2.1% and that came despite a fall in US and global oil prices.
The Dow surged higher by 263 points, or 1.5%, to 17,947.44.
And the Nasdaq Composite added 56.22 points, or 1.2%, to 4,947.44, reversing some of last week’s losses for tech stocks.
Meanwhile, the US dollar resumed its rise with the dollar index, a measure of the greenback against its six major currencies rose , climbing 0.8% to 98.05.
Brent crude futures, fell 0.5% to $US56.13 a barrel in London, while West Texas Intermediate eased 0.8% to $US48.48 a barrel in New York.
The losses here yesterday stood out because there were not replicated elsewhere – the sell off was all home-grown.
The ASX 200 Index lost 74 points, or 1.2% to 5846.1 points, while the All Ordinaries Index fell 1.2% to 5816.3 points.
Ahead of the end of the month and quarter later today, the ASX 200 is down nearly 2% for the month but still up 8% for the first three months of 2015, thanks to the 6.3% surge in February.
BHP Billiton shares fell 2.1% to end at $30.10, while Rio Tinto shares eased 1.2% to $55.85.
Fortescue Metals Group shares lost 3.8% to $1.93.
But it was the falls among the big four banks (which account for around 30% of the total market), which drove much of the surprise slide yesterday.
Commonwealth Bank shares fell 1.3% to $93.10, Westpac shares eased 0.2% to $39.13. ANZ shares lost 1.2% to $36.36, and National Australia Bank shares also fell 1.3% to $38.32.
