CANBERRA: The Australian sharemarket has changed direction for the fourth session in a row, heading to its lowest close this year on an energy stocks drag, after that sector had lifted the market yesterday. The energy stocks move came after oil prices fell sharply overnight, having a day earlier surprised investors by holding their price against heavy Chinese sharemarket losses.
At the official 4.15pm (AEST) close, the benchmark S&P/ASX200 had fallen 91.6 points, or 1.7 per cent, to 5288.6, while the broader All Ordinaries had dipped 84.3 points, or 1.57 per cent, to 5295.5. It was the lowest price the bourse has hit in seven months. Stocks in Australia’s energy sector were led down by a 4.3 per cent decline in the US crude oil price and a 3.4 per dip in global Brent benchmark.
IG market analyst Angus Nicholson said declines had been expected today in energy and resources, they having been “some of the biggest losers on the European and US exchanges”.
“The main question for the index was how the banks fared today. Ongoing concerns about capital requirements and perhaps lending exposure to the resources and agricultural sectors seem to have impacted the banks today again, with the sector declining 1.3 per cent (prior to close),” he said.
Highlighting the oil price pain were shares in Origin Energy, which fell sharply despite the group largely meeting its earnings guidance.
“This is not entirely surprising given Origin is heavily leveraged to oil prices from its oil-linked gas prices,” Mr Nicholson said.
“With this collapse in prices, the onus is on the firm to continue to reduce net debt.” Meanwhile, the minutes of the latest US Federal Reserve policy meeting from overnight were more dovish than expected.
While most members of the policy-setting FOMC saw the conditions for a rate hike “approaching”, there were clear concerns around inflation, or lack thereof, it said.
Energy stocks ended the day 5.78 per cent lower, leading an all-sector decline. Santos fell 7.12 per cent to $5.61, while Woodside slumped 3.56 per cent to $31.69. Origin Energy was down 13.04 per cent to $8.60 after posting a loss of around $700m. Materials fell 2.09 per cent, with BHP Billiton down 3.1 per cent to $24.38 and Rio Tinto off 2.45 per cent to $49.41.
Financials were 1.73 per cent softer, with the big four banks in retreat. ANZ shares shed 2.38 per cent to $29.13 while Commonwealth Bank fell 2.71 per cent to $76.15. National Australia Bank lost 1.66 per cent to $32.04 while Westpac gave up 1.56 per cent to $32.20.
AMP retreated 1.75 per cent to $6.17 after lifting its first-half profit by 33 per cent. Consumer staples shed 0.61 per cent.
Wesfarmers rallied 1.19 per cent to $40.86, after lifting its underlying profit by 8 per cent but Woolworths fell 2.46 per cent to $26.57. Meanhile, Qantas shares fell 6.12 per cent to $3.53 after the airline swung back to a full-year profit, while Telstra retreated 1.45 per cent to $6.12.
Elsewhere, Tatts fell 3.79 per cent to $3.81 despite a lift in its full-year profit. ASX rose 0.47 per cent to $42.35 after its profit and revenues were buoyed by a large number of new stock listings.
Brambles fell 2.61 per cent $10.06 after its full-year result offered a significantly softer earnings growth forecast than analysts had hoped. And APN lost 12.88 per cent to 57.5c after it suffered a significant fall in first-half profit.
Looking ahead, Santos, Coca Cola Amatil, IAG and Medibank are among the big names to report corporate earnings tomorrow while, overseas, the investors will get a look at US leading index figures and existing home sales data as well as the pivotal Philadelphia Federal Reserve business survey.