In an entirely predictable manoeuvre, the developed world’s oldest adolescent has once again failed to solve its problems at the eleventh hour. Once again, according to the Greek PM, the fault lies with everyone but Greece itself. Amid hints of recriminations and dark conspiracies optimism evaporated. Markets in Europe started the sell off, but US markets took it further, suggesting disappointment at this latest baulk at the gate is not yet fully priced in share markets.
Futures are pointing to only modest falls at Asian Pacific openings. However, with little data due the selling may accelerate across the region unless there is a positive surprise from the continent. Locally, a softer AUD may add some support, but technical selling could kick in, in recognition of the failures at resistance. These failures at both the index and single stock level are likely to reinforce each other.
Of particular note in this sentiment swing are recent earnings revisions. Seek, Flight Centre and MacMahon Holdings have all warned this week, and may face renewed pressure in today’s weakened environment. Adding to potential volumes and volatility is the looming financial year end just four trading days away.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.