Yet another fall in iron ore prices overnight Monday will add pressure to the fragile state of sentiment in the stockmarket today.
The spot price fell another 1.5% overnight to $US58.58 a tonne to take the fall in the past three trading days to nearly 7% and a succession of all time lows for the current index based pricing and trading system.
The fall in the iron ore price comes as Wall Street rose overnight, but could not offsett the sharp falls of last Friday.
As a result our market will start flat, with no leads except for the lower iron ore price and the lingering effects of Goldman Sachs recommendation to clients to sell bank shares.
Small bank shareholders will ignore the Goldman Sachs advice, as they have done repeatedly to other scare mongering stories about the health of our banks in the past six years.
The Aussie dollar remained above 77 US cents overnight as well as investors around the world turned back to riskier investments – the greenback eased and US bond yields fell to around 2.20% for the 10 year security, down from 2.24% at Friday’s close.
Around $24 billion has been wiped off the Australian sharemarket yesterday in what was an overreaction to the strong US jobs figures for February which automatically triggered speculation the US Federal Reserve would lift rates sooner than later.
The ASX 200 closed down 78 points, or by 1.3%, at 5821. This morning there won’t be much change at the opening of trading while investors work out a trend.
Gold prices rebounded a bit from Friday’s big drop, rising around $US2 to $US1,166 an ounce.
On Wall Street, The S&P 500 rose 8.17 points, or 0.4% to 2,079.43; the Dow added 138.94 points, or 0.8%, to 17,995.72 (it was up more than 200 points at one stage).
The Nasdaq Composite rose 15.07 points, or 0.3%, to 4,942.
Shares of Apple Inc. jumped by up to 2.4% as the company unveiled its much-anticipated Apple Watch device as well as a new, thinner MacBook notebook computer. But the gains faded and the shares finished only 0.4% higher.
