Stocks down as dip buyers come to the rescue of banks
The Australian stock market fell again after a brief respite on Thursday as the rally in major miners ran out of steam.
The S&P/ASX200 fell 15.9 points, or 0.18 percent, to 8,624.8 points at noon on Friday, while the All Ordinaries index lost 16.6 points, or 0.19 percent, to 8,864.7 points.
Dip buyers stepped in following the post-earnings season sell-off of the big four banks; This peaked on Wednesday, when Commonwealth Bank shares had their worst day on record, falling 10 per cent.
The decline wiped out almost $30 billion of the bank’s market value.
CBA rose 2.4 per cent to $160.25, while Westpac rose 0.3 per cent to $35.83, NAB rose 0.3 per cent to $36.52 and ANZ rose 0.3 per cent to $35.12.
Energy stocks rose on rising oil prices after RBC Capital Markets warned against optimism that a timely solution to the Persian Gulf energy crisis will be found.
“We are highly skeptical of a major reopening in June or a return of maritime traffic to Feb. 27 levels for the foreseeable future,” said Helima Croft, head of global commodity strategy at RBC.
“The optimistic scenario appears to be based on the weak assumption that there is a relatively easy policy tool that can be deployed to enable ships to pass through the strait again when the economic pain becomes unbearable.”
Woodside, Santos, Ampol and Viva Energy rose as Brent oil futures rose above $107 a barrel, coal miners also improved and uranium stocks fell.
Miners weighed heavily on the stock market; The basic materials sector lost 2.9 percent after BHP and Rio Tinto cooled off their record-breaking rises and copper prices slumped.
Gold miners were in a sea of red with the precious metal falling to US$4,612 ($A6,418) an ounce and the All Ordinaries gold subsector falling 2.6 per cent.
IG market analyst Tony Sycamore said this decline followed stronger-than-expected US economic data, which supported the US dollar and bond yields and increased the possibility of an interest rate hike in the US.
Utilities also had a negative impact on the stock market, falling more than two per cent following similar declines in AGL and Origin.
ASX-listed BT shares rose more than four per cent after falling for most of the month; This was helped by a recovery of almost nine per cent after Xero’s earnings miss on Thursday led to a sell-off.
Consumer-facing stocks made a modest recovery of about 0.7 percent, but both staples and discretionary companies remained under pressure as fuel costs, inflation and rising interest rates weighed on confidence.
Retail property group Vicinity Centers rose 0.6 per cent after exchanging contracts to buy Western Sydney’s Eastern Creek Quarter for $400 million, according to company news.
Mineral Resources shares fell more than 7 percent after chief executive Chris Ellison sold $112.5 million of stock in a market selloff.
Treasury Wine Estates, which owns Penfolds, rose after French billionaire Olivier Goudet spent $31 million to increase his stake in the winemaker to more than nine per cent.
The Australian dollar is buying 71.87 US cents at 72.03 US cents at 5pm on Thursday.
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