The market is down 65 after an 85-point rally on Friday with$3 billion worth of business done in the last couple of hours of trade. The “froth” from Friday has blown straight off today. We have been down 89 at worst.

Futures were down 23 this morning, with the Dow Jones down 25 on Friday breaking its streak of 10 consecutive gains, longest run in 17 years. Weak consumer sentiment numbers didn’t help. CPI numbers were much in line with expectations.

Cypriot bailout fears — Eurozone finance ministers announced an unprecedented tax on Cypriot bank deposits as part of an EU bailout plan. Deposits in every bank account in Cyprus will be levied at 6.75% of all deposits up to 100,000 euros and 9.9% above that. It caused a run on banks with almost all ATMs cleaned out of cash on Sunday. Fears of a similar tax in other European countries sank the euro and has the Gold sector up this morning.

A Federal Reserve report on the capital requirements for banks (stress tests) noted only two small banks failed. Other financials including Goldman Sachs and JP Morgan Chase will need to submit capital plans by the end of the 3rd quarter.

Worst Sectors — Telecoms (-1.1%), consumer services (-0.6%), consumer goods (-0.4%) and healthcare (-0.3%).

Best sectors — Utilities (+0.6%) and financials (+0.2%).

Metals down — Copper down 0.65%, nickel down 1.89%, znc down 1.27%, aluminium down 0.80%. Spot iron ore up $1.70 to $134.60. The A$ is at 104.09c.

  • New vehicle sales unchanged in February at 95,708.
  • M2 Telecommunications Group (MTU) — Will acquire 2 rival operators in deals worth a combined $248 million. The company will buy Dodo Australia and will also buy listed telecommunications carrier Eftel (EFT). MTU is up 1.08% to 469c.
  • Media laws — Looks like the Stephen Conroy’s proposed media changes are going to be amended or dumped as it becomes clear they will not pass in their current form this week. A compromise looks likely to include the abolition of the reach rule and a halving of licensing fees.
  • Aurizon (AZJ) — The Queensland government has announced the sell down of $806 million worth of shares – half their holding – the second sell down – to institutions today. They will sell down from 18.2% to 8.9%. They are selling 200m shares to institutional and sophisticated investors at 403c. They will book a $300 million profit on the sale. AZJ is 0.62% to 406.5c.
  • FOMC meeting this week — Looking for any comments about budget negotiations or the monetary policy timeline. With unemployment 7.7% they are going to continue their $85 billion worth of asset purchases per month indefinitely.
  • RBA minutes on Tuesday.
  • China –HSBC Flash Manufacturing numbers due out Thursday.
  • Ex-dividend today – WOW (62c), NCM (12c), PRY (6.5c), ENV (3c), CDD (18c), SKE (7c), MTU (10c) plus others.
  • Gold price expected to spike on the back of the Cypriot bailout issues. Up $10 this morning.