The local market has descended deep into the red today, with disappointing reporting from CBA and Woolworths sparking a broad and savage sell-off. The index has fallen around 125 points, or 2.15%.
Given the very weak leads from international markets overnight, and the residual concern over yesterday’s RBA statement, it was always going to be a tough day for the ASX200. However, things went from bad to worse when two of the market heavy weights released sub-par trading updates. Selling has been fast and furious, amid solid volumes.
The protagonists, CBA and Woolworths have both fallen a staggering 5%, and even defensive stalwart Telstra is sharply lower. The big miners are faring better than most, with FMG one of few stocks actually trading higher in the session after gains in iron ore.
From a technical perspective, the local index is at a precipice. Today’s decline sees it breach the major support level around 5750. If there’s follow through, traders will be looking way down to 5400 for the next major level.
The Aussie dollar has continued to trade inversely to the equity market, firming despite this morning’s average Retail Sales figures. The bullish sentiment remains after yesterday’s RBA statement, which was interpreted as a little hawkish after failing to provide clear guidance on its easing agenda. One Australian dollar currently buys 0.7960 USD.