After two days of big gains with the ASX 200 up more than 5%, the overnight futures market has pencilled in a sharp, 60 point fall when trading resumes this morning.
That’s despite a 2% gain on Wall Street overnight Tuesday after markets in America were closed on Monday for the Memorial Day holiday.
Traders in the ASX 200 futures market looked through that gain – which was powered by tourism and related stocks such as airlines (up 16% on Wall Street), shipping lines, and tourism operators which are not in favour in Australia.
Wall Street ignored a grim trading update yesterday from Air New Zealand which confirmed more cuts to stay and big losses and write-downs, the collapse of a major South American airline and more argy-bargy over the carcass of Virgin Australia.
The gains here on Monday and Tuesday were powered mostly by financials, led by the banks.
Tuesday’s 2.9% gain for the ASX 200 was biggest one-day rise in eight weeks with the index ending 164 points higher at 5780 points. That was after a 2.1% rise on Monday.
The ASX200 has also moved out of bear market territory, as the index is now less than 20% from the highs reached in February.
The domestic market was also boosted by Wall Street futures pointing to gains of about 2% tonight. That happened, but the impact faded for the overnight futures market.
The ASX financial sector climbed 4.3% and real estate stocks was up 4.5%. All sectors rose more than 1%.
Among the banks Westpac rose 6.3%, NAB gained 5.6%, and ANZ shares were up 6%. VBA shares added 3.9%.
Fortescue Metals lost 0.4% to $13.78 after reaching record highs last week. Iron ore prices weakened in Asian trading yesterday which will hit the sector today.
The price of 62% fe fines delivered to northern China fell 2.5% to $US95.28 a tonne, according to the Metal Bulletin.
Coca Cola Amatil dropped 1.6% after a weak trading update (see separate story).
