Banks weigh down market as Aussie shares continue slump
The Australian stock market started the month weakly, tracking a recovery in global risk appetite following a hawkish speech from the governor of the Bank of Japan.
The S&P/ASX200 fell 48.9 points on Monday, falling 0.57 percent to 8,565.2 points, while the All Ordinaries lost 52.2 points, or 0.59 percent, to 8,866.5 points.
IG market analyst Tony Sycamore said the morning’s modest gains quickly turned red after signs of further rate hikes in Japan dragged the Nikkei, creating a domino effect that weighed on U.S. futures and the local stock market.
“The support for the Japanese yen is coming and the Nikkei doesn’t like it and that has somehow flowed into US stock futures, Bitcoin and a little bit into the ASX 200 today,” he told AAP.
“We were expecting a slightly stronger opening, but today we are below the 8600 level again.”
The crash also came as exchange operator ASX struggled to fix an outage affecting the publication of market-sensitive announcements, with scores of companies halting trading for much of the day and ASX Ltd suffering a 2.8 per cent loss in its share price.
Eight of the 11 local sectors fell, with healthcare, consumer staples and IT stocks falling. The energy sector rose 0.5 percent, driven by rising oil prices after Ukrainian drones hit two Russian ‘shadow fleet’ crude tankers.
The heavyweight financial sector lost 0.9 percent as all four major banks traded lower; ANZ bore the brunt of this move, falling 1.3 percent to $34.20; CBA’s 0.6 percent decrease fell to $151.64.
Insurance broker AUB was the worst performer in the top 200, falling 17.8 percent after two private equity suitors abandoned a takeover bid worth more than $5 billion.
Raw materials stocks rose 0.3 percent, helped by major mining companies BHP, Rio Tinto and Fortescue; Iron ore futures hit four-week highs during the session as shrinking steelmaking inventories in China outweighed another month of contracting factory activity.
Gold stocks were broadly lower as investors took profits from the previous week’s rise, despite the spot price rising to US$4,226 ($A6,461) per ounce.
Evolution Mining fell almost two percent, while Northern Star and Newmont trailed by 0.2 percent either side of breakeven.
Consumer staples stocks fell 0.9 per cent, with declines in Coles and Woolworths weighed by a few company-specific declines.
Shares in wholesale giant Metcash fell 9.2 per cent to $3.36 as it emerged from a disruption-affected trading halt after the IGA supplier said tobacco sales fell by more than a third in the six months to October due to black market trading.
Penfolds owner Treasury Wine Estates fell 0.7 per cent after recording a $687 million goodwill writedown on its US business.
Healthcare stocks trailed the broader market, with a 1.7 percent decline in sales almost industrywide, except for Ramsay Health Care (+1.2 percent), which provided a small island of green in the segment’s sea of red.
Imaging IT provider Pro Medicus fell 1.6 percent to $262.18, erasing a significant portion of its nearly eight percent gain the previous week, even as it announced a seven-year, $25 million deal with the U.S. healthcare network.
The Australian dollar is buying 65.41 US cents, down from 65.29 US cents on Friday.
Looking ahead, investors will be watching Wednesday’s quarterly GDP data as well as Federal Reserve governor Michele Bullock’s speech a few hours ago.
ON ASX:
* S&P/ASX200 fell 48.9 points or 0.57 percent to 8,565.2 points
* More broadly, All Ordinaries rose 52.2 points, or 0.59 percent, to 8,866.5
CURRENCY DISPLAY:
One Australian dollar is traded as follows:
* 65.41 US cents, down from 65.29 US cents at 17:00 on Thursday
* 101.79 JPY from 102.09 JPY
* 56.40 euro cents from 56.35 euro cents
* 49.48 British pence, from 49.35 British pence
* 114.18 New Zealand cents from 114.17 New Zealand cents
