Local stocks are once again under selling pressure following yet another slump in the price of gold, and explosions at the Boston Marathon which are being treated as a criminal investigation. US stocks sold off sharply in the final hour of trade following the explosions, with the Dow Jones Index falling 60pts in a matter of minutes.
At lunchtime in the East, the All Ordinaries Index is down 0.8 per cent, adding to yesterday's 1 per cent fall.
Gold slumped again overnight and has continued to break through US$1350 an ounce in electronic trading this morning. There are real concerns some smaller Australian gold mines will be unable to make profit with gold at these levels, high labour costs and a strong Australian dollar. Australia's largest listed gold producer Newcrest Mining (NCM) has fallen a further 6.5 per cent in early trade to $16.76 while smaller companies such as KCN, AGG, AQG and OGC are all down in the order of 7-10 per cent.
There is some support on the market however. Defensive players like Telstra (TLS) are firmer by 0.3 per cent to $4.67 while Woolworths (WOW) is up 0.7 per cent.
Minutes from the Reserve Bank of Australia's April meeting have been released showing the central bank believes inflation will remain close to target and that interest rate sensitive parts of the economy are responding to rate cuts.
The Australian dollar has rebounded during the early trading session, after falling through US103c during New York trade. At Midday in the East, the AUD is worth US103.3c, €79.25c and £0.6761.
So far on the market, one billion shares have changed hands, worth $2.01 billion. 169 shares are up, 743 are down and 254 are unchanged.
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