Whoops, Apocalypse. After Fridays indiscriminate charge of the bulls, it was down to Earth with a serious thud. Still it was good to see something being able to rack up 100 unlike the Australian top order! And all it took was a tiny little country in the Med, whose economy is the size of Tasmania, chock full of Russian gang money, lax banking rules and a whole heap of other problems. The big question is, Cyprus? Unique or just a template for similar moves in other PIIGS? We shall find out but in an already overstretched market it was enough. Big losses across the board giving back all of Fridays gains with the exception of Telstra (A$4.50, -0.2%). Financials took the breakup badly, Australia and New Zealand Banking Group (A$28.08, -2.2%), Commonwealth Bank of Australia (A$69.22, -1.4%), National Australia Bank (A$30.49, -2.6%) and Westpac Banking (A$29.97, -3.0%) all in trouble whilst others like Suncorp Group (A$11.63, -1.8%) and AMP (A$5.22, -2.4%) were slightly less infected. The big miners were predictably in the gun sights, BHP Billiton (A$34.69, -2.4%), RIO Tinto (A$59.55, -2.9%) and Fortescue Metals Group Ltd (A$3.90, -3.9%) all suffering the same fate.

Positive stocks were hard to find, Telstra (A$4.50, -0.2%) one of the few bright spots but other defensives were taken out and shot. Woolworths (A$34.75, -3.6%) went ex-div and then some Wesfarmers (A$42.10, -2.4%) no excuse for them Westfield Group (A$10.83, -1.5%) also fell.

One bright spot was the Gold shares as the shiny stuff seemed to be better after the Cypriot issues surfaced. Harder to tax gold bars but also harder to move at a moment’s notice too. Newcrest Mining (A$22.16, +0.8%) firmed as did issues like Silver Lake Resources (A$2.26, +5.6%), Resolute Mining (A$1.365, +0.7%), Oceanagold (A$2.50, -0.4%) and Regis Resources (A$4.38, +1.6%). In energy stocks Woodside Petroleum (A$36.45, -1.9%). Santos (A$12.86, -2.1%) and Origin Energy (A$12.93, -1.1%) all fell foul of the sell-off. The momentum gathered some pace later in the day as we waited to see how bad ‘Zombieland’ was going to be and what would happen in the US (futures down 140!). As falls in the rest of Asia got worse, so did our market down over 100 points on reasonable volume. Not pretty but this will pass. The market has been looking for an excuse to pullback and this is it. Funny how when all the talking heads on CNBC are so bullish and the World is a safe place, something comes out of left field and it’s all over red rover! What do they know!

A few industrials bucked the trend with Fairfax Media (A$0.635, +1.6%) looking better as were Trade Me Group (A$3.77, +2.7%), Transurban Group (A$6.31, +0.6%) and also M2 Telecommunications Group (A$4.85, +4.5%) proving that the Dodo is not extinct as it moves to take out some of the opposition by buying them and Eftel . Market darling Sirius Resources (A$4.37, -12.42%) fell in a heap as did Sundance Resources (A$0.225, -8.2%) and Buru Energy (A$2.55, -6.6%). Not their kind of market I am afraid.

Stocks in the News

Big crossing today in the company “formerly known as QRN” as 200m shares were crossed in the market at 4.03 as the Queensland Government bailed. The stock loved the removal of the overhang and even on a red day like today was positive Aurizon (A$4.06, +0.5%).

House stocks in the news today included Buru Energy (A$2.55, -6.6%) following a deal to sell down some of their Fitzroy basin acreage to their Japanese partners. It raised $21m so the need to raise money in the near future. Linc Energy Ltd (A$2.70, -5.3%) also in the downdraft.

ASG Group (A$0.495, +17.9%) found some friends in a big way today, with an indicative, non-binding, conditional, good as long as nothing changes ,maybe we will maybe we won’t bid for the company at $0.68 cents.

Coca-Cola Amatil has announced that its chief executive Terry Davis will step down next year after more than 12 years running the beverage group. He will retire on August 31 next year, said CCA Chairman, David Gonski.

In economic news today: China’s new home prices rose in February from a year ago for a second consecutive month, though gains are expected to ease after the government unveiled this month tougher tax plans to curb real estate speculation.

Sales of new motor vehicles in Australia were flat in February, from January, but were still the best ever for that month and up strongly on February last year.

Figures from the Australian Bureau of Statistics out on Monday showed new vehicle sales were unchanged in February at a seasonally adjusted 95,708. That followed an upwardly revised 2.2 per cent dip in January. Sales were still up 9.4 per cent on February last year.

ASIC has delivered it reports on dark pools and high frequency trading, and the message is a clear one: ‘Whatever.’

Tomorrow’s News Today

‘Zombieland’ is back on the agenda. Just when you thought it was safe to go back in the water ,one of the bozos at the ECB and other Troika members comes up with a plan so cunning that you could put a tail on it and call it a weasel. The markets will be in ‘risk off’ mode as the Cypriot Government moves to finalise the small print of the deal. Maybe some reprieve for small deposit holders but an ugly precedent. Russia is not going to be happy but it was Politically unpalatable for the EU to bail out this one as its status as a Money Laundering centre made it hardly likely that they would just write a cheque. Good to see the European Union now in the business of confiscating Private Property by decree!

The new Chinese President, Xi Jinping, has said he will fight for “the great renaissance of the Chinese nation,” in his first speech as head of state. Closing the annual National People’s Congress, he urged delegates to reject extravagance and fight corruption.

More jobs to go at HSBC around the World. And all this whilst the US fear index the VIX is trading at 11.30!High on complacency. Maybe not for long!

Funny, I looked back at an email I sent to clients on 11th February and suggested that the Authorities were looking at a levy on bank deposits in the Finance Ministers meeting then…and it came true! Well there you go! Not as big a surprise for some.

Clarence
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