Ex-div BHP drags ASX200 lower

There’s been plenty of action on the local share market today, with the ASX200 diving early before staging an reasonable comeback.

There’s been plenty of action on the local share market today, with the ASX200 diving early before staging an reasonable comeback.

The overnight plunge on Wall Street triggered fairly broad based selling after the open, with the index losing over 1%. Then came some fairly uninspiring domestic releases, in the form of consumer sentiment and home loans data, and it seemed the writing was on the wall for the day.

However, as investors shifted their focus to regional drivers, namely Japan, sentiment took an abrupt turn and the market rallied, erasing around half its losses. Perhaps there was also the realisation that declines in the US were partially a consequence of USD strength concerns, which do not have the same bearing on our local market.

The Materials sector remains the weakest link, with an ex-div BHP plummeting 5% and accounting for around 17 index points. Elsewhere, the Industrials and Financials are edging lower, while the Energy sector is feeling the pinch after continued USD strength curbs demand.

After market close, attention will move to China, with year on year Industrial Production due at 4:30pm AEDT. Expectation is for a read of 7.7%, so anything materially different will likely have implications on the local resource stocks tomorrow morning, as well as the under pressure Aussie dollar more immediately.

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