ASX falls, but trims losses in afternoon trade
The ASX is set to end the week in red, with the ASX 200 benchmark index down 0.7% in afternoon trade. Things got off to a weak start this morning, with shares dropping by as much as 1.6%, but the market has clawed back some losses into the afternoon.
After hitting a new record high of 7,847 last Friday, the market has since pulled back by more than 2.5%.
The sharp fall in the ASX200 could be a canary in the coal mine for global equity markets, warns IG market analyst Tony Sycamore. This comes as anxiety builds, and US bond yields surge, ahead of next week's FOMC meeting in the US. The 10-year US bond yield has jumped 22 basis points to 4.29% this week on higher than expected US inflation data.
"As many would recall, surging US bond yields caused a monstrous headache for global stock markets last year," Sycamore said.
Today’s worst performing sectors are Materials and Consumer Discretionary, while Energy and Real Estate are bucking the trend of the wider market.
The banks have also logged another weak day after warnings during the week from Macquarie analysts that ASX bank stocks are overvalued. CBA and Westpac are each down 1.1%, ANZ is down 0.4%, while NAB is just slightly in the red.
A 10% fall in the iron ore price — a result of ongoing economic weakness in China — has also weighed on the local market. $ASX Ltd(ASX.AU$
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EvanderAU OP : It's all down to put it bluntly!