Yesterday, the ASX 200 index closed above its opening level for only the second time this year. This tentative sign of buying interest hinted at a sell the rumour buy the fact reaction to China’s economic data which soft but stabilizing economic conditions and contained few surprises.
A cautious start to trading seems likely this morning. The question for traders will be whether yesterday’s performance can be repeated? Will buying momentum build despite a luke warm session on international markets and another drop in the oil price.
Although, BHP’s production report missed expectations on iron ore production for the quarter, its overall guidance of the year is down only 10m tonnes following loss of production at the Samarco mine in Brazil. Elsewhere it is ahead of guidance on petroleum and coal. While BHP produces a solid report with few material surprises, the overall story is one of flat to marginally lower production against a background of sharply lower and still falling commodity prices.