Australian Market. Asx.

[nev]

just trying to understand why the asx is linked so closely to the american market,

example america increases interest rates and our stock market drops 95 points.

that was a $21billion dollar loss the biggest single loss since september 11th even though the market has gone up 8%over the last quarter and a wopping 60%over the last 10 quarter's seems like a big drop just because another country increases there interest rates.

just shows how fickle the asx is.

[trt]

just trying to understand why the asx is linked so closely to the american market,

example america increases interest rates and our stock market drops 95 points.

<{POST_SNAPBACK}>

Interest rate increase in the US make the money market there more attractive = investment fund selling asx stock to buy into the US currency.. thats how I see it.. if thats true then we should have also seen a weakening of the AUD against the US as a result.

[ArtfulD]

just trying to understand why the asx is linked so closely to the american market,

example america increases interest rates and our stock market drops 95 points.

<{POST_SNAPBACK}>

Interest rate increase in the US make the money market there more attractive = investment fund selling asx stock to buy into the US currency.. thats how I see it.. if thats true then we should have also seen a weakening of the AUD against the US as a result.

<{POST_SNAPBACK}>

Beware rising rates also tends to go hand in hand with rising inflation, rising inflation tends to go hand in hand with currency devaluation...Some of the countries with the highest bank rates in the world are ones whose currencies have collapsed. Its a damned if you do, damned if you dont with rates. Its not always the case, but need to take a big overall view of the impact of rates. Rising rates will harm the US economy which is so heavily debt laden on the consumer side.

[simcity]

from the age 6 / 10 / 2005

INTEREST rate fears in the US and a weaker oil price were cited as catalysts for yesterday's market slide but I suspect that the big force was something less serious and more satisfying for investors — profit-taking.

from the news.com

INVESTORS called an emphatic end to this year's 30 per cent rise in the share market yesterday as a flood of stop-loss sell orders helped fuel the biggest one-day fall in share prices for three years.

The All Ordinaries index plunged 2.15 per cent as investors moved to lock in gains from a surge in prices since the last big fall in May.

The selling had no obvious trigger but came amid comments from US Federal Reserve board members that US inflation was reaching the upper limit of an acceptable range, and a big fall in Australian building approvals.

But investors were also becoming concerned that share valuations were becoming stretched relative to global peers following a 29 per cent gain in the All Ords since January 1 - 17.5 per cent of that since the low of May 4, the last big breather for the market.

[Mighty Mouse]

just trying to understand why the asx is linked so closely to the american market,

example america increases interest rates and our stock market drops 95 points.

America sneezes and the rest of the world catches cold.

The greenback is the worlds reserve currency and many other currencies are pegged to it. If they unpeg from it, (as is feared by many) the greenback could collapse.

The ASX has had a huge run lately, it was well overdue for a correction.

Don't forget what happened to the world's stock markets in October 1987. If you have a look at the charts back then and compare them to today's charts, you will see a frightening similarity. The 1987 anniversary is fast approaching.

It will only be the brave or the foolhardy who will be buying stocks today. (Thurs 6 Oct) Perhaps some bargain buying will hold the slide.

[westozzie]

just trying to understand why the asx is linked so closely to the american market,

example america increases interest rates and our stock market drops 95 points.

that was a $21billion dollar loss the biggest single loss since september 11th  even though the market has gone up 8%over the last quarter and a wopping 60%over the last 10 quarter's seems like a big drop just because another country increases there interest rates.

just shows how fickle the asx is.

<{POST_SNAPBACK}>

One of the reasons is that there are Autralian companies listed on the NYSE the biggest one is New Corp when they trade ADR,S Australian Depository reciepts it has a direct impact on the share price on the ASX another reason is that there are so many joint american companies on the ASX which are subsideries which track movement OS it doesnt necesarily track it all the time I have seen the ASX go up 40 points when the NYSE has been down a 100 depends on a lot of factors. Interest rates/Exchange rates/Ecomoic news reports/ Terrorism/Policy but you are right the ASX makes up a mere 3% of world market trade very small in the overall picture.

[Chang_paarp]

just trying to understand why the asx is linked so closely to the american market,

example america increases interest rates and our stock market drops 95 points.

that was a $21billion dollar loss the biggest single loss since september 11th  even though the market has gone up 8%over the last quarter and a wopping 60%over the last 10 quarter's seems like a big drop just because another country increases there interest rates.

just shows how fickle the asx is.

<{POST_SNAPBACK}>

The largest companies in the ASX , wuch as BHP & News Ltd, are dependant on US$ trading for a large % of their income and profit, so anything that affecxts the US$ affects the companies that have the largest effect on the ASX.

The large companies such as BHP, and other mining companies have contraccts in US$ so when the US$ changes so does their profit margin. The same applies to those who rely on imports as many contracts are written in US$. This said local factors can affect the share price as much or more than a change in the exchange rate.

It will be interesting to see what impact News Ltd transferring to the US has on the ASX, many prediction of a drop as the value News is removed from the ASX.

Chang

[COBBER]

This drop over the last few days is not only related to US interest rates. Investers are taking profits in the belief that the recent rises have been unrealistic. Also the slight drop in oil prices has wiped a bit off the oil and mining related stocks.

[nev]

thank you guys for enlightening me on the way the market works,must admitt there is so much to learn about the market will be intresting to see if the market has a third straight day of high losses. nev

[TizMe]

The heavyweight banks weighed on the index today. The Commonwealth Bank shed 40 cents or 1% to $37.64, Westpac shed 30 cents or 1.5% to $20.45 and ANZ weakened 22 cents or 1% to $23.00.

A volatile day to end a turbulent week. The market fell 20 points at the open but then rebounded. There were initial sighs of relief as the local market ventured into positive territory and continued to accelerate into lunch time. However in the final two hours of trading the All Ordinaries once again found itself down 20 points. At the close the All Ordinaries finished just two points weaker at 4399.90 points. Over the course of the week the All Ordinaries lost 192 points or 4.2%.

I think that the correction now gives some opportunities to buy.

[Mighty Mouse]

I think that the correction now gives some opportunities to buy.

Be very wary of the dead cat bounce.