S&P/ASX 200 (XJO) retraced from circa 5900 points to 5876 points in the last hour of trading.
The close represented a gain of 0.7% or 43 points, well below the 100 point gain indicated by the SPI Futures prior to the market opening this morning.
READ: S&P/ASX 200 expected to surge 100 points after strong late rally in the US
Perhaps this was an indication that money was being taken off the table before the US market opens.
The fear factor seemed to re-emerge towards the end of the day as the S&P/ASX 200 VIX index (XVI) pushed up above 1855 after hovering in the vicinity of 1750 mid-afternoon.
The big end of town
Looking across the index heavyweights, it was a mixed bag with financials out of favour.
Bear in mind that they have a substantial impact on the performance of the overall index.
Of note was the fact that the S&P/ASX 20 (XTL) underperformed the ASX 200 with a gain of 0.6%.
Also of interest was the 1.8% gain in the S&P/ASX Small Ordinaries index (XSO), substantially outperforming the blue chips.
Banking sector takes its toll as resources rally
Macquarie Group, (ASX:MQG) the best performer in the Top 20, gained 3.8%.
However, three of the big four retail banks finished in negative territory with Westpac (ASX:WBC) only up 0.1%.
Outside the financials, it was the major resource stocks that saved the day with Rio Tinto Limited (ASX:RIO) and BHP Billiton Limited (ASX:BHP) up 4% and 2% respectively.
The US and reporting season likely to shape tomorrow’s market
Investors will be waiting with some trepidation to see whether or not last night’s retracement in US markets was a dead cat bounce.
There will also be some important news breaking on the ASX which could be a swing factor.
Reporting season is starting to ramp up and some major players are releasing their results tomorrow.
Stocks such as News Corp (ASX:NWS), AMP Ltd (ASX:AMP), AGL Energy (ASX:AGL) and Mirvac Group (ASX:MGR) have a large index weighting.
These are some of the biggest players across the media, insurance, utilities and property development sectors.