What a day! Some serious volatility today as more selling in financials combined with resource selling to hammer the market down over 75 points at one stage. 66 point range today.

It tried valiantly to get itself up off the mat but in the end the lifting was too much and we closed down near our lows for the day, around 44 points off.

The economic figures at 11.30am today started the slide as the Aussie Dollar put in more swoops and rises than a fairground attraction. The weak business numbers today really set the cat amongst the already scattering pigeons. It was never going to be a good number and the astrologists (sorry, I mean economists) missed it once again by a country mile. Weak Nikkei, weak Dow and there you go 72 down at its worse around 4900.

However as the day wore on some sense did return with the banks finding some nice yield driven support. Australia and New Zealand Banking Group (A$27.53, -0.3%), National Australia Bank (A$29.32, -4.0%), Westpac Banking (A$28.86, +0.5%) all well off their lows and actually positive by the end except NAB going Ex Commonwealth Bank of Australia (A$67.61, +1.1%) even managed a positive for most of the day. Other financials did much better with QBE Insurance Group (A$15.93, -0.2%), Suncorp Group (A$12.47, -0.4%), Insurance Australia Group (A$5.58, +2.2%) relatively unscathed, hardly surprising given they did not defy gravity and the laws of physics like some of their bigger companions. Sorry GS but you haven’t called this well!

After yesterday’s high profile switch from WBC to BHP Billiton (A$34.46, -1.2%) it was back the other way today. The falls in the iron ore price last night did nothing to help the miners either where once again there were some bloodied bodies. Fortescue Metals Group Ltd (A$3.35, -5.1%), RIO Tinto (A$53.96, -1.4%) and BHP Billiton (A$34.46, -1.2%) all looking weak again despite the falling currency. In the small Ore space they just got smaller with Atlas Iron (A$0.77, -6.1%), Mount Gibson Iron (A$0.48, -4.0%) and Aquila Resources (A$2.12, -2.3%) all on the nose.

Few positives around in the Gold stocks as the shiny stuff rose a little overnight, Kingsgate Consolidated (A$1.58, +2.6%), Evolution Mining (A$0.78, +4.0%), Regis Resources (A$3.95, +6.2%), Beadell Resources (A$0.695, +6.9%) and Medusa Mining (A$2.39, +3.9%) all got a wriggle on today. However spare a thought for hapless Newcrest Mining (A$14.42, -1.8%) even with gold up above $1400 they still cannot rally. Bet they wished they had never heard of Lihir!

Media stocks were a tad weaker with Fairfax Media (A$0.61, -0.8%), Ten Network (A$0.285, unch), APN News & Media (A$0.29, -3.3%) and Seven West Media (A$2.18, -1.8%) all suffering whilst energy stocks were mixed, Woodside Petroleum (A$36.30, -0.5%), Oil Search (A$8.35, -0.7%), Origin Energy (A$13.47, +1.1%) and Santos (A$12.94, +0.2%) in the big caps while in small cap land Buru Energy (A$1.465, +4.6%) were slightly better which is about time!

Industrials were weaker as well with once feted Telstra (A$4.77, -2.9%) coming in for some profit taking along with other defensives like Wesfarmers (A$39.28, -2.1%) (still suffering from their strategy update) and Woolworths (A$33.18, +0.2%). CSR (A$2.15, +0.5%) and Boral (A$4.55, +1.1%) both benefitted from the better building numbers while US focussed James Hardie Industries PLC (A$9.75, -2.4%) suffered as the Aussie dollar rebounded.

Biggest losers today were Fortescue Metals Group Ltd (A$3.35, -5.1%), Atlas Iron (A$0.77, -6.1%),Arrium (A$0.795, -5.4%) and Transpacific Industries Group Ltd (A$0.86, -3.9%) in large caps whilst winners were Reece Australia (A$23.49, +4.6%), Virgin Australia (A$0.455, +4.6%), AWE (A$1.325, +4.3%) and WorleyParsons (A$20.70, +3.3%).

Volume was pretty good today which says something .. either we hit a selling climax or overseas guys were just happy to get out whatever. Saw most of the volume in NABCD and National Australia Bank (A$29.32, -4.0%) as dividend plays abound.

Stocks in the News

House stocks in the news today included Linc Energy Ltd (A$1.585, -3.9%) which under whelmed after its announcement of a tie up with Exxaro in the Sub Saharan African UCG business. Whilst house favourite AWE (A$1.325, +4.3%) pushed ahead although Karoon Gas Australia (A$5.55, -2.5%) weakened slightly.

Former Woodside head honcho Don Voelte has landed another plumb gig with Kerry Stokes’ Seven Group (A$7.43, -2.2%) today as he has been handed the CEO key to the executive drinks cabinet.

Sorry Gerry, but NAB’s latest online retail sales index showed Australians spent $13.5 billion in the year to April, up 21 per cent, or $2.3 billion, from $11.2 billion in the previous corresponding 12 months.

One leading economist called today’s today’s capex data weak for Q1 as they expected, with mining activity slowing sharply, but no evident lift elsewhere in the economy. While the 5% drop will drag on Q1 growth, they hold our 0.8% q/q forecast for next week, with strong consumer and net exports expected to offset weak capex.

Good news though on Building Approvals which were up over 9% against the tea leaves suggesting 4%.Close..Not even!

Tokyo and the rest of Asia were weaker with the Japanese market down 5%.Official correction now! China not so bad at 0.3% down. Still put Tokyo in perspective they had rallied 45% this calendar year before the recent rout.

Once again “Sell in May and go away” has proved prescient advice. From April 30th to May 30th the Banks have been significantly sold off. Until next May then!

Tomorrows News Today

If you pop your head out of the doona early tomorrow, you can catch me on Sky Business News co-hosting the 6.30am show! Too early to be sensible I know but I will try.

Putting credit into the Chinese economy does not seem to be having the desired effect as figures today revealed each $1 in credit firepower added the equivalent of 17 cents in GDP, down from 29 cents last year and 83 cents in 2007, when global money markets began to freeze.

Few corporate moves happening with controversial Chinese pork producer putting some pork on their fork by buying US porksters, Smithfield in a $4.7bn deal, and the Buffmeister is laying out a poultry $5.6bn to boost his investment in the power sector by buying NV Energy.

UK’s Chancellor has closed a gaping loophole worth $900m..now that’s what I call a loophole! Probably more black hole!

The European Commission has said it will allow some EU member states to slow their pace of austerity cuts, amid concerns over growth. France, Spain, Poland, Portugal, the Netherlands and Slovenia are all being given more time to complete their austerity plans. France will get two more years to bring its budget deficit below 3% of GDP. Never going to happen! Pretend and extend a well used mantra!

Clarence

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