The S&P/ASX200 Index has fallen for five consecutive trading days, down 4.8 per cent since May 21.
Yesterday, the index closed at 4959.857. That is almost right on a technical support of 4,960, according to a trader. The market has been volatile. At one point the index had fallen as low as 4,931.20 before rising as high as 4983.90, up 0.401 of a point from the May 24 close.
“We could bounce or fall further,” says the trader.
The S&P/ASX200 Index is up 22 per cent over 12 months. But it is up just 6.7 per cent this year. The Nikkei 225 Index has gained 36 per cent, the S&P 500 Index has added 16 per cent and the Swiss market has surged 20 per cent, according to Bloomberg data.
“There may be a renewed interest in shorting Australia,” says Credit Suisse strategist Damien Boey, who points to perceptions of a deteriorating Australian economy now that mining investment may have peaked and the Reserve Bank is “behind” the curve on cutting its benchmark cash rate.
Still, with volatile intra-day trading, some may be coming into the market to snap up stocks they think may have been sold off too heavily.
ANZ shares at one stage yesterday fell as much as 1.5 per cent to $27.28. But the stock closed up 17 cents, or 0.6 per cent, at $27.85. ANZ shares have fallen 7.8 per cent since May 20, according to Bloomberg data.
Telstra fell yesterday as much as 2.3 per cent to $4.76 yet it closed up 3 cents, or 0.6 per cent, to $4.90, down from its intra-day high of $4.95. Telstra shares have dropped 4.7 per cent since May 22, according to Bloomberg data.
Capping any market gains may be the continued poor performance of mining stocks, specifically iron ore producers. Rio Tinto and Fortescue. They took the brunt of the resources sell-off yesterday. Rio lost $1.40, or 2.6 per cent, to $53.11. Fortescue dropped 11 cents, or 3.1 per cent, to $3.43.
The spot iron ore price on the New York Mercantile Exchange has fallen to US$126.73 a tonne or 19 per cent from its year to date high of US$157.30 on February 8, according to the Bloomberg data.
The eighth-worst performing shares this year in the S&P/ASX200 Index is iron ore producer Atlas Iron which has plummeted 58 per cent this year, according to Bloomberg. Rio Tinto shares are down 20 per cent this year. Fortescue’s stock has fallen 26 per cent.