A weak start is expected for the ASX today ahead of the release later in the day of the December quarter GDP figures and other economic data for the month of December and 2015 as a whole.
That was after the local market halved its losses yesterday thanks to a small rebound on Chinese markets (up 0.45% for the Shanghai composite).
The ASX 200 lost 0.7% or 34 points after being down close to 90 points in early dealings.
But that was yesterday and today a similar sized fall is expected at the start ahead of the release of the Chinese economic figures.
The data is not expected to surprise – GDP growth around 6.8% to 7%, a rise in retail sales, weak production and investment. But investors played it very safe this morning in the absence of leads from closed US markets and marked down the ASX 200 futures by 35 points.
Not that there wasn’t plenty of negative leads from markets that were open – oil prices hit new multi-year lows, especially Brent crude in Europe – while the London stock market closed down 0.4% at a new three-year-low. Markets in Germany and France also ended lower after opening stronger.
The Stoxx Europe 600 Index fell to a 13-month low, oil touched the lowest since November 2003 after the lifting of those international sanctions on Iran and investors worried about today’s Chinese economic data releases.
While selling in commodities and equities was weaker than last Friday, the tone was nevertheless negative and investors seem to be looking for any reason to reduce their exposures to shares.
Oil prices reached a 2003 low below $US28 per barrel on Monday as the market prepared for a sharp rise in Iranian exports after the lifting of sanctions over the weekend.
Brent crude fell to $US27.67 a barrel in early European trading last night, while US crude edged lower, but on lighter volumes because of the holiday. Brent was trading around $28.68 a barrel at 8am, having made up much of the early fall. But it was still 0.9% down on the day.
US crude oil fell 1.6% by the close at trade around $US28.94. Gold was off $US2 an ounce at just under$US1,089 an ounce, and copper edged 1% higher to $US1.96 a pound in electronic trading on Comex.
Iron ore prices jumped another 3.7% overnight to end at $US42.66 a tonne as the recent rebound continued. But BHP and Rio Tinto shares were weaker in London overnight, down 1% and 0.6% respectively.
