SYDNEY: The Australian sharemarket opened weaker following heavy losses in commodity markets including a 1.5 per cent dip in the oil price.
At the 10.15am (AEST) official market open, the benchmark S&P/ASX200 index retreated 12.9 points, or 0.23 per cent, to 5,577.4 points, while the broader All Ordinaries index declined 13 points, or 0.23 per cent, to 5,568.3.
CMC Markets chief market analyst Ric Spooner said a night of selling on international markets “suggests that some commodity markets may be entering another capitulation phase as prices in oversupplied commodities continue the process of adjusting to levels that will force production cuts”.
“Investors in resource stocks are likely to be unsettled by news that the US oil price fell another 1.5 per cent last night while copper was down around 1.8 per cent on US markets,” he said.
“News that Brazilian iron ore miner, Vale, beat production expectations with a 7.5 per cent increase in production compared to the June quarter last year is also a negative for shareholders in Australian iron ore stocks.”
Mr Spooner added that another key to performance today was likely to be whether the big yield stocks like the major banks attracted buying from investors rotating out of the resource sector.
“The outlook for banks may not have been helped by yesterday’s news that ANZ has increased its mortgage rate for landlords underscoring the fact that regulatory risk management comes at a cost, in this case to landlords and tenants,” he said.
On Wall Street, stocks fell following disappointing earnings reports from a handful of big US companies including American Express, 3M and Caterpillar.
The Dow shed 119 points, or 0.7 per cent, to 17,732 while the the S&P 500 index fell 12 points, or 0.6 per cent, to 2102, and the Nasdaq Composite Index lost 25 points, or 0.5 per cent, to 5146.
