The free fall on Australian markets over the last 24 hours appears to have come to end, but not before bearish investors knocked 2.5% of the S&P/ASX200 – in addition to yesterday’s 3.5% fall – in just over 30 minutes this morning.
Feverish selling started when markets opened and continued until the turnaround commenced just after 10.30am. By 12.20pm the S&P/ASX200 was down a more moderate 1.3% on yesterday’s close, to 6184.5.
Ben Griffiths, a senior portfolio manager with fund manager Eley Griffiths, says Centro’s dramatic fall from shareholder favour yesterday has broadened into a more general investor funk.
“A bit of a contagion has clearly set in. The flight the market has taken after the Centro situation has translated into nerves in general, and what we’re seeing is really very aggressive share price movements in a market which was already a little on the thin side,” Griffiths says.
The market bumps do not appear to have thrown out Australia’s manufacturing sector too much, however, with the Westpac ACCI Survey of Industrial Trends showing that conditions were strong in the December quarter.
While the current index fell slightly from 56.4 in November to 55.8, it remains well above the decade average of 52.8, and is in growth territory.
Australian Bureau of Statistics figures released today shows that imports increased by 2% on a balance of payments basis between October and November 2007, suggesting Australian consumers are continuing to give their credit cards a workout.
And despite all the wobbles about, Australia continues to rank as one of the world’s safest places to do business. The Dun & Bradstreet (D&B) Global Risk Indicator has Australia ranked as the third safest country in which to do business, behind Austria and Switzerland.