Seems everything in the garden is not quite so rosy. After all, it is a Monday and we did hit a level not seen since 2008 on Friday. A killer combo of bad Chinese export numbers, falling commodity prices especially iron ore and copper plus the Japanese economy expanding less than estimated in the fourth quarter and the current-account deficit widening to a record in January, all conspired to send us into a spin. Storm clouds are gathering with ‘Abenomics’ seemingly unable to really fire the Japanese economy and the sales tax increase looming in April. China was under pressure as well as the nine day budget meeting draws towards its close. The Yuan dropped as the PBOC lowered interest rates too putting pressure on local Chinese property developers who borrow from overseas.

Our market threw in the towel early with pressure on resources in general and iron ore in particular. BHP Billiton Limited (A$36.16, -4.1%),RIO Tinto Limited (A$61.20, -5.8%),Fortescue Metals Group Ltd (A$4.92, -9.4%),Arrium Limited (A$1.345, -10.6%) and Atlas Iron were big casualties as iron ore officially entered bear market territory falling to around #115 overnight. In the final analysis we closed at 5411 down 51 points on surprisingly ok volume especially considering it was a Melbourne public holiday today. Most sectors today were a nasty shade of red ,but defensives like Woolworths Limited (A$36.66, +0.8%),Wesfarmers Limited (A$43.60, +0.4%) and Csl Limited (A$72.48, +0.8%) bucked the trend. Banks fell away as did Telstra Corporation Limited (A$5.03, -0.8%) but Crown Resorts Limited (A$17.79, +1.4%) resisted valiantly as did Flight Centre Travel Group Limited (A$55.57, +1.4%), consumers stocks and media groups drawing strength from “Malcolm in the Middle’s” comments on media ownership law changes. Seven West Media Limited (A$2.17, +1.4%) and APN News & Media Limited (A$0.595, +4.4%) found friends but Ten Network Holdings Limited (A$0.35, -1.4%) seriously?

Mining services continued to suffer led by Boart Longyear Limited (A$0.275, -5.2%),Macmahon Holdings Limited (A$0.12, -4.0%) and WorleyParsons Limited (A$16.54, -2.3%). Building stocks also ease with Csr Limited (A$3.25, -2.4%),Boral Limited (A$5.81, -0.2%),James Hardie Industries PLC (A$14.77, -3.4%) and Brickworks Limited (A$14.28, -1.4%) all losing out to profit takers.

Runners and riders today included Leighton Holdings Limited (A$23.09, +11.4%)(takeover bid)Domino’s Pizza Enterprises Limited (A$22.29, +3.3%),Donaco International Limited (A$1.445, +5.1%)(talked about it for a while now),Southern Cross Media Group Limited (A$1.44, +2.1%)(media changes?) whilst the losers today included a swag of miners like Arrium Limited (A$1.345, -10.6%),Fortescue Metals Group Ltd (A$4.92, -9.4%) Asian stocks were down between 1-2% with China the worse. AUD hanging around 90.4,Gold $1333 and Bitcoin at $708.

Stocks and Stories

M&A activity in abundance today with two out of the starting blocks.

Leighton Holdings Limited (A$23.09, +11.4%) Looks like the big moves in Leighton had more substance than they were letting on to the market as the Spanish majority holder has moved today to partially takeover the Aussie contractor. Hochtief are offering $22.15 cash in what must have been one of the most leaked takeover for some time. Hopefully the ASIC will investigate fully as this one had more leaks than a Soviet submarine.

Westside Corporation Limited (A$0.295, +13.5%) has received its own takeover offer today from Landbridge ,a Chinese investment firm. The offer is 36 cents in cash.

Pacific Brands Limited (A$0.56, +8.7%) also had a good day today as a block trade of 10m shares went through the market at 53 censt. Another takeover perhaps?

Santos Limited (A$14.07, -1.7%) fell away today as news that one of their CSG projects had contaminated an aquifer with Uranium from a leaking pond.

In house stocks Strata-X Energy Limited (A$0.37, +8.8%) had a positive day with some volume which makes a change, Regeneus Ltd (A$0.47, +2.2%) also was better following on from their cancer results last week.

Must be the weather yeah? Chinese exports in February fell 18.1 per cent from a year earlier, following a 10.6 per cent jump in January, the General Administration of Customs said on Saturday.

The People’s Bank of China lowered the daily reference rate by 0.18 percent to 6.1312 per dollar today, the weakest level since Dec. 3.

Shanghai copper has dropped by its 5 per cent daily limit to its lowest in more than four years after weak Chinese trade data fanned concerns over its metals industry.

Japanese Gross domestic product grew an annualized 0.7 percent from the previous quarter, less than a preliminary estimate of 1 percent and a 0.9 percent median forecast in a Bloomberg News survey of 20 economists. The current-account deficit widened to 1.59 trillion yen ($15.4 billion), a record in data back to 1985, the finance ministry said.

The market seems to be taking this as a positive sign that Beijing is getting tough. Bit like when Bear Stearns went bust in the US! First Chinese overseas bond default not helping sentiment either as Chaori Solar takes the dubious honour.

Tomorrow’s News Today

There has been a huge focus in recent weeks of the Sydney and Melbourne property market and the emergence of the cash up Chinese as a potent force pushing prices to Icarus like levels. I am reminded of how rats desert the ship before trouble hits.

The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.

The size of the overall UK economy will this summer overtake the peak level it was at before the 2008 financial crisis, a business lobby group says. In upgraded forecasts, it estimates economic growth will be 2.8% this year – up from its earlier estimate of 2.7%.

And here’s a question, how come two passengers can get on an airplane with stolen passports yet I get busted for carrying a tube of toothpaste or deodorant that is over 100ml?

That is all.

Clarence xxx