The rebound in the local market yesterday looks like being a one day wonder as the rally ran out of puff offshore (especially on Wall Street, but not in Europe) and commodity prices resumed falling, especially iron ore, gold and oil.
Our market will start with a loss of more than 25 points on the ASX 200 and it could be more given the sharp fall in iron ore, gold and oil.
The looming fall follows the optimistic 2.2%, 114 leap on the ASX 200 on Tuesday.
Equity prices fell after reports of a possible bomb at a soccer stadium in the German city of Hannover – that caused a soccer game to be abandoned, but no bomb was found.
The price of iron ore touched its second-lowest mark in a decade overnight and by the end of the, the spot price for immediate delivery to the port of Tianjin in China was trading at $US45.80 a tonne, down 3.2% from its prior close of $US47.30. That put it within sight of the seven year low of $US44.10 hit in early July.
Comex gold futures prices fell $US16 an ounce to $US1,084 an ounce, wiping out Monday’s gains. US oil future dropped more than 25 to around $US40.75, also wiping out the gains of earlier in the week in the wake of Friday night’s Paris attacks.
Wall Street ran out of puff, closing with tiny gains on the day. The Dow was up 7 points, Nasdaq, one point and the S&P 500 shed 3 points. That was despite a good quarterly profit report from giant retailer, Wal-Mart, before the opening.
