Australian markets have reacted strongly to the release of the HSBC PMI for China earlier today which printed its weakest level in 6 months of 49.6.
That’s back in contraction territory.
The Australian dollar and ASX are both now under pressure, as a result because of our ties to the Chinese economy.
Last night’s failure to hold above resistance was a bad sign for the AUD which has given up all the gains it saw yesterday, and at one point traded back to the level just prior to its one cent bounce.
The ASX is sitting at 5,257 down more than 1% or 62.5 points.
The SPI 200 is looking very vulnerable and at risk of breaking a 2 month uptrend as the chart below shows.
While things might be expected to improve into the close, it might be an ugly night unless stocks overseas can move higher.