Congratulations to Adam Scott. However on markets, not a great start to the week. No chip ins from the bunker, no miraculous putt to save the day, only shots hoiked off into the bushes accompanied by terrible swearing. Very much like my Golf! After the huge falls on Friday for Gold, it backed up with another wealth destroying day. The price broke convincingly through 1500 and cruised in a panic to 1450.The falls have been savage and are been amplified on Gold shares across the globe, and morning news out of China of an anaemic GDP number at 7.7% was enough to give our market another kick in the guts. The market splintered once again into the have and have nots, those that have a good business and dividend stream and those that have not. Resources have not. BHP Billiton (A$32.31, -3.1%), RIO Tinto (A$55.09, -3.2%) and Fortescue Metals Group Ltd (A$3.76, -6.2%) led the resource stocks down with the Materials Index back at 2008 levels. However the big damage was done in gold shares with some horrendous falls as panic swept the market. Silver Lake Resources (A$1.53, -14.0%), St Barbara (A$0.90, -13.5%), Newcrest Mining (A$17.92, -8.2%), Kingsgate Consolidated (A$2.96, -15.2%), Evolution Mining (A$1.215, -7.6%),Regis Resources (A$3.60, -12.0%) and Beadell Resources (A$0.70, -12.5%) were crushed along with other resource stocks like Atlas Iron (A$1.025, -7.7%),Mount Gibson Iron (A$0.50, -4.8%) and Panaust (A$2.38, -8.5%). Nasty all around. The only bright spots on this bleak Monday were as usual the banks and Telstra (A$4.65, +0.9%).National Australia Bank (A$31.77, +0.5%) and Commonwealth Bank of Australia (A$68.51, +0.7%) were the standouts with Australia and New Zealand Banking Group (A$28.79, +0.3%) and Westpac Banking (A$31.59, +0.2%) registering slight falls. One or two of the other defensives gave a little back with Woolworths (A$34.46, -0.9%), Wesfarmers (A$40.68, +unch) and CSL (A$58.80, -0.8%) seeing red.

The market was off its lows as the close approached but investors remained skittish despite some solid rallies in BHP Billiton (A$32.31, -3.1%) and RIO Tinto (A$55.09, -3.2%). Newcrest Mining (A$17.92, -8.2%) however continued their march towards 15.00.

In the winners enclosure today apart from Adam Scott were Seek (A$10.60, +1.3%), Westfield Retail Trust (A$3.17, +1.0%) and Harvey Norman (A$2.63, +1.9%). In the Canine club today were the miners Medusa Mining (A$3.35, -16.0%), bad day for production downgrades, Boart Longyear (A$1.105, -10.9%). Oceanagold (A$2.13, -9.4%) and Ausdrill (A$2.12, -8.2%).

Energy stocks were also hit hard today with Santos (A$12.40, -1.5%), Origin Energy (A$12.50, -1.7%), Oil Search (A$7.30, -2.5%) and Woodside Petroleum (A$36.00, -1.1%) all suffering as oil pulled back. Mining services had a shocker with NRW (A$1.28, -8.2%), Coffey International (A$0.38, -9.5%) and Cardno (A$6.55, -5.1%) leading the sector down.

Volume was a little better than normal but the smell of burnt fingers in resources will linger for some time. Any bounce will be short lived. Big range day today with lows around 4933 on the SPI and highs around 5005 on the opening. Confidence is hard to gain and easy to lose.

Stocks in the News

It really was all about Gold, Medusa Mining (A$3.35, -16.0%) picked a good day to downgrade guidance on production.
 In house stocks Kina Petroleum (A$0.385, -8.3%) eased after announcement that gravity survey have commenced in PPL 338/339.

Some economic news today both domestically and from our friends in the East.

Here, Official figures show the number of home loans approved in February rose 2.0 per cent. There were 45,423 approvals in the month, compared to 44,547 approvals in January. Economists had expected the number of housing finance commitments to rise by 1.5 per cent in February.

China’s economic growth unexpectedly lost momentum in the first quarter as gains in factory output and consumption weakened. Gross domestic product rose 7.7 % from a year earlier, the National Bureau of Statistics said in Beijing today. That compares with the 8% median forecast. March industrial production increased less than estimated while retail-sales growth matched forecasts.

China’s power consumption in March reached 424.1 billion kilowatt-hours (kWh), 1.9 per cent higher than the same period of 2012, the National Energy Administration (NEA) said.

Tomorrow’s News Today

It will be all about the end of the Commodities boom and the fall from grace of our old friend Gold. This one is really in the dog house as the bulls come to realise that things are not that bad and maybe they do not need their gold stocks after all. Of course the World is anything but a safe place, however the level of Gold ,that had been bought by fast money in Exchange Traded Funds, has been propelling us higher and the Cypriot crisis showed that maybe Gold does not even respond to a full blown monetary stuff up. It did show that maybe there were other things that may be more useful that Gold in an economic meltdown.

These strategy guys are priceless; one large US broking house has now downgraded its Gold price estimate for the year by 7% to $1555! Genius. Wait until the market falls then downgrade. Give the man a huge bonus, by jimmy he deserves it!

Chinese Bird flu is spreading and looks like it will slow growth in Chine even more with more cases detected in Shanghai and Beijing. And the US has offered talks to prevent more North Korean aggression. They have even offered to send PSY over the DMZ to help with relations!

Rio Tinto and BHP Billiton are expected to post softer iron ore and coal shipment reports after a series of cyclones hit northern Australia earlier this year. Rio Tinto releases its March quarter production report tomorrow and BHP is scheduled to report on Wednesday.

Socialist candidate Nicolas Maduro has won a narrow victory in Venezuela’s presidential poll. Mr Maduro, who was chosen by the late Hugo Chavez as his successor, won 50.7% of the vote against 49.1% for opposition candidate Henrique Capriles.

And in other news the World Bank today scaled back slightly its 2013 growth forecasts for emerging East Asia and warned about possible over-heating in the region’s larger economies, but the global lender said the Bank of Japan’s sweeping monetary expansion should provide a fillip to developing countries.

I would expect to see the US market give back some of its recent gains in light of softening numbers from the US and China. Things are not that rosy perhaps?

Clarence
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