Australia takes the weight

The gut-wrenching sell off in European and US markets overnight means regional investors are looking for a market to sell. New Year holiday closures in most Asia Pacific markets has Australian shares taking the weight, trading lower in percentage terms than the US close.

The gut-wrenching sell off in European and US markets overnight means regional investors are looking for a market to sell. New Year holiday closures in most Asia Pacific markets has Australian shares taking the weight, trading lower in percentage terms than the US close.

Banks are wearing the brunt of the selling. The explanation varies from the credible (high index weight) to the loopy (energy company exposures) but the sector pressure is real. All four of the major banks have traded down more than 3% today. CBA is holding up best, perhaps due to the results announcement tomorrow.

JB Hifi is a notable performer, one of the few trading higher, after yesterday’s earnings report. Commodity plays are having a mixed day. Energy stocks are among the worst after further pressure on oil prices, but gold stocks are trading in the green after gold touched US $1200 an ounce overnight.

The rally in the last hour of US trading brought some hope to local bulls. However, the limited selling opportunities and a 4% drop in early Tokyo trading suggests any easing of pressure today will be slight and temporary.

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