Market Close: The pain continues as the ASX200 just can’t get a party started

The ASX200 sunk into the red again on Wednesday as a sour mood in the US made worse what was already a fairly dismal Australian undercurrent, proving that sometimes misery doesn’t always love company.

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In the final hour of trades the XJO was down -0.3% to 8,789pts (intraday, that could change come settlement), adding to what has been a fairly lacklustre week. Indeed, the XJO’s YTD returns remain pared back, where they were recently +10% they’re now hovering just north of 8%.

At least there’s the fact we bounced back from an intraday dip with a show of surprising force. Looking around the traps, utilities and financials led the gainers in the final hour; real estate and IT both led laggards. In the former case, that’s obvious: Australia’s still grieving the fact interest rates are gonna stay higher for longer.

As for IT, that’s driven by poor sentiment in the US where even Morgan Stanley analysts are now saying that AI companies have gotten too frothy. It’s earnings season in the States and all the big names have been seeing charts continue to move upward and to the right, but apparently even those best placed to avoid the pitfalls of correction are getting worried.

So there’s that – but that isn’t really what’s driving fear down under more than our own economic malaise.

I did spot one interesting move on a chart comparing BHP and CBA across the last week, it looks like there was one big move out of the miner and back into the bank, suggesting perhaps the ‘materials rotation’ hasn’t quite materialised for that obviously large investor.

For what it’s worth: gold prices at US$3,963/oz; iron ore on the SGX down a few pips to US$103.55/tn.

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