Asia stocks may remain under pressure
City Index October 4, 2011 9:33 PM
<p>Asian shares are expected to continue falling today but the rate of decline might start to moderate, given the magnitude of yesterday’s very large losses. […]</p>
Asian shares are expected to continue falling today but the rate of decline might start to moderate, given the magnitude of yesterday’s very large losses. The market will continue to weigh on China’s slowdown but we have been keeping a close eye on commodity prices and base metals in particular.
While declines have been significant over the past month, copper seems to have found a temporary floor at around US$3/lb. it has held it over the past 24 hours. Nickel, usually a very discretionary metal used in production and a good signal of overall commodity direction, was up over 6% also.
It’s unclear if these prices are sustainable, downside risk is real and very possible, but for now it seems like there is a floor being set. Industrials and financials could lead today’s selling.
In Australian corporate news, David Jones, Harvey Norman and JB Hi-Fi are holding up relatively well during the past week’s selloff. There’s expectation among traders that rate cuts will come in time for Christmas and these retail stocks are positioned to benefit.
In the small cap space, Bega Cheese is set to pick up the 30% of Tatura milk it doesn’t already own. The stock is emerging as a key agricultural and food play, compounded by the woes of Elders announced yesterday.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.