Financials fail to hold tired market
The market failed to find any inspiration today. A mixed lead from Wall Street and softer commodities markets saw investors retreat at the open. The market made a second dip around 1pm AEDT - coinciding with a fall in the Dow futures and a weaker Hang Seng.
The miners and banks did most of the damage to the benchmark. They were collateral damage in a tired market.
The Aussie dollar pulled back below 99 US cents, while both the price of gold and oil retreated.
Telstra and the diversified financials did their best to hold the market up but to no avail.
Financial stocks lifted on the back of a KKR bid for Perpetual. The private equity firm is offering close to a 30 per cent premium for the firm. Private equity is attempting to leverage off the superior financial returns that Australia currently offers. There's also a sense that Australia's trade advantage (symbolised in the Aussie dollar's recent ascent) has further upside potential and the corporate sector wants to get in a foot-hold.
BHP Billiton and Rio Tinto made the press after the plug was pulled on their Pilbara JV. David Jones also made headlines as the sexual harassment case involving CEO Mark McInnes was settled out of court.
Volumes were a little down today but should pick up as the week progresses with plenty of corporate and economic news to digest.
David Taylor (Market Analyst, CMC Markets)