Once again Gold shares were smashed early as was the material stocks to push the market down 50 points within half an hour of the opening on margin calls and pure panic before the bargain hunters stepped in. This was especially the case in BHP Billiton (A$32.15, -0.5%) and RIO Tinto (A$54.98, -0.2%) which saw their lows early before some sense prevailed. As usual the Banks were relatively solid in the face of adversity. National Australia Bank (A$31.83, +0.2%) toyed with a green day whilst Commonwealth Bank of Australia (A$68.14, -0.5%), Westpac Banking (A$31.50, -0.3%) were the worse with Australia and New Zealand Banking Group (A$28.86, +0.2%) unchanged. In other financials QBE Insurance Group (A$13.20, +0.6%) were solid however Macquarie Group (A$36.75, -0.9%) suffered from the resource malaise. The market has steadied as bargain hunters have stepped in but confidence is low and volumes are not the stuff of brokers dreams. Lots of players happy to sit on the sidelines and wait for the dust to settle. RBA comments that it has not ruled out rate cuts also helped the market limp out of the valley. Tonight will be interesting to say the least. If we get a positive bounce from the US and a strengthening commodity market we could see confidence improve and the shoppers hunting for those stocks that have hot the bargain bin.

Energy stocks got hit as Oil continues to track the gold and other commodity prices down with Woodside Petroleum (A$35.38, -1.7%) leading the way followed by Santos (A$12.13, -2.2%) and Oil Search (A$7.25, -0.7%), whilst smaller stocks became smaller with Karoon Gas Australia (A$4.16, -4.1%), Buru Energy (A$2.10, -4.5%), Linc Energy Ltd (A$1.875, -4.1%) and REY Resources (A$0.055, -15.4%) all suffering.

Defensives gained yet again with Wesfarmers (A$40.68, unch), Woolworths (A$34.76, +0.9%), Westfield Group (A$11.37, +0.5%) and Telstra (A$4.69, +0.9%) all showing a clean pair of heels.

However the masters of disaster were the Gold shares today with Newcrest Mining (A$17.00, -5.1%), Silver Lake Resources (A$1.49, -2.6%), St Barbara (A$0.845, -6.1%), Kingsgate Consolidated (A$2.80, -5.4%), Evolution Mining (A$0.995, -18.1%) all in serious trouble although off their worse. Mining services stocks also got caught up in the panic with Boart Longyear (A$0.965, -12.7%), Seven Group (A$8.60, -4.7%), Drillsearch Energy (A$1.10, -6.4%), Coffey International (A$0.35, -7.9%), Maca (A$2.47, -5.0%) and NRW (A$1.18, -7.8%) the worse of them. Media stocks were also in the naughty corner with APN News & Media (A$0.31, -4.6%), Ten Network (A$0.285, -1.7%) and Seven West Media (A$2.04, -3.3%) all succumbing to selling pressure.

Volume was average for the market at the moment. Disappointing given the moves we have had.

Stocks in the News

Hard to find much news around today in any stocks. The big mover in recent days has been the Gold price with its biggest falls in 30 years. The fall looks like it has been arrested slightly with some bargain hunting sneaking in and stability returning. The conspiracy theories are now sloshing around the market with talk of a Fed plot to get the Gold price down, to help out the dollar reserve status, being up there .Apparently they were the ones behind the naked sell order for 500 tons of Gold on Friday which set the whole thing in train. The rally in the Gold price is encouraging that we may have seen the bottom. Up from 1325 to 1365. I would say that every Gold company will be starting to look at hedging again. If the price stays here then production for some will be marginal and those old friends Care and Maintenance will be getting a call! We now know what happens when the crowded traded trade gets unwound very quickly. Nasty. But maybe this is the blow off bottom, but with all blow offs it was messy.

RIO Tinto (A$54.98, -0.2%) announced their 1st quarter operations review with Global Iron ore shipments up 7% from this time last year. Record first quarter production numbers from the Pilbara with capacity now running at 237m tonnes a year. Mined copper was also up 26% but the recent slide at Bingham Canyon is going to hurt production badly with 100,000 tonnes knocked off their estimates. Seems like some good numbers here from RIO which may turn sentiment slightly.

In economic news today sales of new motor vehicles dipped 0.6 per cent in March, from February, a third month of modest losses that pointed to a flattening of demand albeit at historically high levels.

RBA Assistant Governor ‘Ringing’ Debelle said almost all of the $284 billion spent on mining expansion since 2003 had been funded by company earnings, rather than by borrowing or by placements to shareholders I suspect.

Tomorrows New Today

The Boston Bombings will be front page news unfortunately and our hearts and thoughts go out to the families and victims of this senseless attack.

South Korea tries to jump start its economy with PSY release of a new video and dance moves, plus they announced a $17bn stimulus package to help the ailing economy. That’s Gangnam style. And just to add some spice to the Peninsula, A US Black Hawk chopper has crashed near the North Korean border. No reason given.

Talk about buying opportunities Hong Kong shoppers are flocking to jewellery shops to clear out physical gold stocks after gold’s recent price plunge. A local commentator quipped that the precious metal is being knocked off at ‘‘seafood price’’. Gold turnover at some large jewellery franchises has increased by as much as 50 per cent compared with last week, according to a Hong Kong newspaper. Most of the buyers are apparently from mainland China.

Seems now everyone is rushing to downgrade their China numbers for the year after the GDP miss yesterday. Always a tricky one given a few public holidays in the period so one number does not a hard landing make!

Someone will correct me I am sure, but there has been around $45bn worth of M&A activity announced in the US over the last few days. Dish Network is making a $25.5 billion bid for Sprint Nextel, an effort to derail the No. 3 U.S. wireless carrier’s acquisition by Softbank.

Clarence
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