A quiet night of trading following the ructions of the previous session leaves Australian investors in a quandary.  An opening gain to take back some of yesterday’s disproportionate losses is likely. Investors must answer the question; is this the end of selling, or the beginning of a significant down leg?

In the absence of leads from other markets investors could exercise caution, potentially erasing any early rise. Calm currency and commodity markets also offer little guidance, with the exception of further falls in oil prices. There are also no significant data releases due today.

Overall sentiment will become clearer as regional markets come on line. Yen strength usually means Nikkei weakness, so investors will treat falls in Tokyo as a given. Opening moves in Singapore, Shanghai and Hong Kong are potentially better indicators of the market mood and today’s closing levels.

In Sydney the focus could fall on sectors and stocks. A clear preference for defensive stocks and safe havens yesterday may mean financials and resource stocks again underperform. Sigma Pharmaceuticals announced a 5.3% increase in annual profit and a 3 cent dividend, both slightly below forecasts. An increased buyback program may ease investor angst.