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Australian stocks are down for a fifth consecutive session

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In what is now becoming a familiar theme in 2016, Australian stocks are sliding yet again this morning, following the weak lead provided by European and US markets overnight.

Here’s the scoreboard after 15 minutes of trade.

  • ASX 200 5103.0000 , -20.13 , -0.39%
  • All Ords 5159.7 , -18.31 , -0.35%
  • AUD/USD 0.7066 , -0.0005 , -0.07%

The 0.39% decline takes the year-to-date decline for the benchmark ASX 200 index to 3.36%.

By sector, materials and energy are leading the market lower, down 1.3% and 2.2% respectively, following substantial declines in crude oil and iron ore overnight.

Financials, the largest component of the index by market weight, have fallen by a smaller 0.3%.

Helping to offset those losses, gold, real estate investment trusts, healthcare, industrials and utilities are all pushing higher by between 0.24% to 2.21%.

As to whether the sell off in stocks continues later in the session will largely be determined by the performance of Chinese markets when they come back online from 12pm AEDT.

While there were numerous factors that drove the Australian market lower yesterday, the surprise weakening in the Chinese renminbi – starting with the PBOC fixing the USD/CNY rate sharply higher from the previous session’s close – was the main catalyst that led to the benchmark ASX 200 index registering a second 1% plus decline in a row.

Should a similar scenario eventuate today with the PBOC fix – something that appears likely given it closed sharply weaker overnight – it suggests that further selling pressure may arrive later in the session.

China aside, markets will be also watching for the release of Australian building approvals and international trade figures at 11.30am AEDT.

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