ASX Drops 1%, No Wall St Improvement

The All Ords (AORD) was down 43.3 points today, or approximately 1% as the Dow Jones late recovery failed to invoke any positive sentiment on the Aussie Market. The S&P200 (AXJO) was also down around the same, falling 42.6 points to 3,970.80 or roughly 1% as well.

It seems despite my prediction yesterday that mining stocks may improve on the back of Dow Jones if some commodity increases are seen was wrong - at least in Australia where the sector fell. I think the news coming out of the third quarter RIO (RIO) report on China production was too much for the local market to bear, with BHP (BHP) again falling another 4.68% to $24.59 and RIO (RIO) falling another 5.13% to close around $62.62 - a level not seen since December 2005. Resources were hit much harder than I expected given the rise in the US overnight - but this may be because Australian Mining Stocks inherently have a bigger exposure to China in respect of Commodities.

Most other sectors were lower with the major banks all posting downward stock movements. NAB (NAB) lost 4.84% to finish at $21.60, CBA (CBA) was done to $41.41, or 2.3%, Westpac (WBC) fell 2.36% to $21.48 and ANZ (ANZ) was at $16.85 - a 2.76% decrease. Of note, Babcock & Brown were 5.2% higher to finish at $1.315 although Macquarie (MCG) finished lower - down 2.14% to finish at $31.36.

Let’s see what action happens on the US overnight, with some more fundamental economic data being released on Friday in New York - the market may take another hammering. On the flip side, if oil continues to drop and an interest rate cut is announced by the US Fed - then 30 Dow constituents may push the overall market higher.