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.
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.
Frequently Asked Questions about this Article…
Australian shares are trading lower in percentage terms due to the New Year holiday closures in most Asia Pacific markets, which has left Australian shares to bear the brunt of the sell-off seen in European and US markets.
The pressure on Australian banks is attributed to their high index weight and concerns over energy company exposures. All four major banks have seen their shares drop more than 3% today.
JB Hifi is performing well amidst the market sell-off, trading higher after releasing a positive earnings report yesterday, making it one of the few companies bucking the downward trend.
Commodity stocks in Australia are experiencing a mixed trend. Energy stocks are under pressure due to falling oil prices, while gold stocks are trading positively as gold prices reached US $1200 an ounce overnight.
The rally in the last hour of US trading brought some hope to local bulls, but the impact on Australian shares is expected to be slight and temporary due to limited selling opportunities and a significant drop in early Tokyo trading.
CBA is holding up better than other major banks, possibly due to anticipation of its results announcement tomorrow, which may be providing some support to its share price.
The New Year holiday closures in most Asia Pacific markets mean that Australian shares are taking the weight of the sell-off, as there are fewer markets open to absorb the selling pressure.
Energy stocks are among the worst performers in the current market environment, facing additional pressure due to declining oil prices.
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