Originally published by CMC Markets
The market has looked through positive data on China’s economy and a rally on US stocks to re-establish the down trend that got under way on Thursday.
Weaker iron ore prices have fuelled the nervous mood early this morning with major mining stocks being sold. The oil price is also showing signs of faltering after rallying 10% over three weeks. Energy stocks are attracting selling this morning as traders take the view that recent gains more than adequately reflect recent improvements in the outlook for oil.
Telstra Corporation Ltd. (AX:TLS) is again under pressure and is yet to show any indication of the price forming a base as investors wait on news of the ACCC decision on allowing its network to be used by other providers for roaming within Australia.
While the stock market is under pressure, the Australian dollar is holding firm. This reflects the fact that the good news on China’s economy builds on the Thursday’s news of a big improvement in new full time jobs. Solid export and industrial production growth in China is yet another indication that global trade and manufacturing has improved in recent months.
Gold and the Japanese yen have both weakened a little in Asian trading, suggesting that markets are taking a wait-and-see attitude towards geopolitical risk and the situation in North Korea this morning and that this may not be the driving force behind the weaker Australian stock market.