SYDNEY: The Australian sharemarket opened weaker today after international markets tumbled overnight following disappointing China manufacturing data yesterday.
At the 10.15am official market open, the benchmark ASX 200 index fell 50.1 points, or 0.98 per cent, to 5046.3 points, while the broader All Ordinaries lost 50.9 points, or 0.99 per cent, to 5066.2 points.
Following the contraction of China’s manufacturing purchasing managers’ index to a six-year low, the Dow Jones Industrial Average eased 2.8 per cent, the S & P 500 stumbled 3 per cent and the Nasdaq Composite Index weakened 2.9 per cent. Oil prices also slumped, with global benchmark Brent crude down 8.5 per cent to $US49.56.
IG chief market strategist Chris Weston said in a note the concern was not so much about China’s downturn, which was expected, but that “the policy initiatives seem engineered on a daily basis and the plans seem to lack a cohesive, well thought-out process”.
Mr Weston said the Australian market would test 5015 in early trade, with further falls possible.
“Last week’s low of 4928 is clearly the bear’s initial target, but with sentiment shot to pieces and markets trending lower, the bias is clearly skewed to short positions,” he said.
“There will be opportunities to be long, but this is a trader’s market and with such little clarity around global growth and whether there will be an impact on earnings, being nimble is an absolute must.”
