So much for the rally following Wall Street. Our market had a massive dose of reality today with the big resource stocks taking it very badly. Hard to know what the trigger was, Balance of Payments, reappointment of Uncle Glenn, Chinese PMI numbers, Korean tension or the Gold price overnight but the bears were out in force. BHP Billiton (A$32.23, -1.5%), RIO Tinto (A$55.38, -2.0%) and Fortescue Metals Group Ltd (A$3.67, -3.4%) all got whacked as did Newcrest Mining (A$19.50, -3.0%), Silver Lake Resources (A$1.96, -7.5%), Medusa Mining (A$3.97, -9.6%), Perseus Mining (A$1.655, -9.6%) and Resolute Mining (A$1.225, -8.2%). In fact few of the Gold shares were spared, most showing decidedly ugly side of owning Gold stocks. The scary thing is that these stocks don’t rally much when the Gold price goes up but get taken out the back and shot when it slips. Only really a couple of winners today with News (A$29.76, +1.7%) and Telstra (A$4.54, +1.3%) some of the bright spots, but there were not many. Maybe we have been spooked by the talk in the media about changes to Superannuation, whatever it was it was painful. The market did find some buyers late in the day to make it look better especially in the Banks, but it was a little half hearted. And a little late! Asian markets rallied though, so maybe local factors at work. Does seem to be a strange reality when the Zombie markets rally on record unemployment whilst our market falls on a great trade deficit number! Shouldn’t this be the other way round.

Anyway in other stocks, Ten Network (A$0.305, -4.7%), Fairfax Media (A$0.62, -1.6%) and Wotif.com (A$4.85, -2.0%) suffered in media land, whilst Property Trusts Westfield Group (A$11.07, +0.6%), Dexus Property Group (A$1.065, +1.4%) and GPT Group (A$3.85, +0.8%) bucked the trend.

In financials there were winners and losers with Westpac Banking (A$31.15, +0.4%), QBE Insurance Group (A$13.70, +1.5%) and National Australia Bank (A$31.11, +0.5%) all better whilst AMP (A$5.10, -1.5%), Suncorp Group (A$11.58, -1.9%) and Insurance Australia Group (A$5.70, -0.5%) in the doggy house.

Stocks in the News Today

Lynas (A$0.495, -2.0%) continued to come under pressure hitting new lows before a small rally but the shorters are having a field day.

Senex Energy (A$0.715, +5.9%) also had a good result as their Hornet 1 well flowed gas at around 2m cubic feet a day.. and Goodman Fielder (A$0.77, +7.7%) were stronger following moves from Elleston capital to increase their holding.

Australia and New Zealand Banking Group (A$28.27, -1.9%) took it badly as their architect of the “Greater China Strategy” has upped sticks and is moving to run a Middle East bank. Interesting indeed and the price was deflated by the news.

In house stocks today Karoon Gas Australia (A$4.72, -4.6%), Linc Energy Ltd (A$2.02, -4.7%) and mining services all suffered at the hands on the nasty red pen. Macmahon (A$0.215, -6.5%) and NRW (A$1.51, -3.8%) were the worse in that sector.

In economic news, Australia’s new homes market has suffered a setback on its mooted road to recovery, with sales falling for the first time in four months. New home sales slid 5.3 per cent nationally in February, driven by sharp falls in Victoria and South Australia, according to the Housing Industry Association.

And good to see economists were close with their forecasts today.. Not.. Australia’s trade deficit narrowed to $178 million in February, official figures show. The February figure compared with a deficit of $1.215 billion in January 2013, the Australian Bureau of Statistics said on Wednesday.

Economists’ forecasts had centred on a deficit of $1 billion.

Malaysian stocks fell the most in 10 weeks and volatility surged to a two-month high on speculation Prime Minister Najib Razak will dissolve parliament as early as today for elections.

Tomorrows News Today

The Big Asian news was from North Korea which has blocked access to the shared economic zone Kaesong. Workers could leave the zone but not get back in. This is a further escalation of tensions and follows news of the startup of Nuclear Enrichment by Kim Jong-un and his cronies.

Seems we will have a few words in the next day or so too from Uncle Ben, Dudley and Yellen whilst they are at the US Monetary Policy Forum in New York sponsored by Canon Inks, so we may see some volatility from the US.

I think this is indeed a sign of the times.. Bitcoin which is a digital unregulated currency has increased in value from US$50 Mid-March to a heady price of US$115 as more people are buying this ‘fictional instrument’ to get their money out of the banks.. once upon a time it was Gold, but not any longer!

I have been suggesting for some weeks that Easter tends to be a high point in the market. The number of times I have gone away on a long weekend all chuffed and happy with the market and a week later it is looking like Easter Bunny droppings is not funny. But the so called bull market in equities in Australia does seem to have been so selective basically banks, telcos and supermarkets! And let’s not get started on volumes! Easiest trade at the moment is shorting resources, so simple, so profitable, so do it!

Thousands of customers with funds in the UK arm of Cypriot bank Laiki will escape any levy on their accounts. The Bank of England’s new Prudential Regulation Authority (PRA) has announced that all those whose accounts are in credit will be automatically moved to Bank of Cyprus in the UK. The UK Chancellor was pleased as punch and went on to say,” “In your very first day in existence, you sorted out a banking problem without having to come to me and ask for British taxpayers’ money. And long may that continue.” You have to wonder if so many escaped the money grab who is going to pay for it.. there was a list of 132 people and companies the other day that had evaded the long arm of the Troika!

Clarence. Xx