- The ASX200 fell by 1% today for the first time since March 23, with heavy falls in mining stocks.
- Richard Coppleson from Bell Potter Securities is very cautious on the current market.
- Coppleson said the ASX could be in for a “nasty month”, and said the index may fall back below 6,000.
It was a rough day on the local market today, as the posted a 1% fall for the first time since March 23.
According to Richard Coppleson from Bell Potter Securities, the local index was “confused and unsteady” today, “and when that happens it doesn’t end well”.
ASX futures were pointing lower following a weak global lead and a slump in base metals overnight, but the selloff picked up steam in afternoon trade.
Today’s price falls in Australia was accompanied by a broader selloff in Asia. Shares in Hong Kong got smacked by more than 2% while China’s Shanghai Composite index finished 1.68% lower.
The ASX200 financials index fell by 0.87%, as Westpac led declines in the big banks with a fall of 1.11%.
But losses were felt most keenly in the materials sector, which fell by 2% as the big miners all lost significant ground.
Trade fears between the US and China continued to linger overnight, with the Trump administration still expected to press ahead with tariffs on another $US200 billion worth of Chinese goods.
Copper prices continued their recent slide and fell by another 2%, while gold and silver also lost ground.
BHP, Rio Tinto and Fortescue all lost more than 2% in local trade. Gold miner Newcrest Mining and BHP spinoff South32 were also more than 2% lower.
“To me the market looks like it’s in the death throes for a nasty month,” Coppleson said, following five straight months of gains where the ASX200 rose by 9.7%.
“I still think we have seen the highs — there is still a very big chance that the market peak has been seen & then these highs will not be breached again until late November-December,” he said.
Coppleson added that he’s “very cautious on markets over the next 6 weeks. If I’m correct we’ll see the the ASX200 back below 6,000”.
The 6,000 mark would equate to a discount of around 3.6% from current levels. Coppleson said falls could extend to as much as 5-7.5% over the coming weeks.
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