australian shares lose a half per cent due to global cues miners and ex divs 1139122015

Australian stocks took their cue from overnight losses on Wall Street following fears of a rate hike triggered by a strong jobs report issued Friday. The ASX also suffered from the ex-dividend effect, particularly BHP Billiton Ltd (ASX:BHP), which was responsible for nearly two-thirds of the decline in the S&P/ASX 200. However, the mining and energy sectors together pressured the local market.

The hallmark of the day’s trading was a sharp rally that commenced in the opening hour of trade at the day’s low of 5,748.70 of the benchmark index and which ended at the day’s high of 5,824.20, recouping most of the losses incurred at the open.

Indices and sectors

The benchmark S&P/ASX 200 on Monday fell 31 points, or 0.5 per cent, and closed at 5,793.2, while the broader All Ordinaries index was down 31 points, or 0.5 per cent, to 5,763.3.

The significant gaining sectors were real estate investment trusts (+1.3 per cent), utilities (+0.67 per cent) and telecommunication services (+0.33 per cent). The big losers were materials (-2.68 per cent), energy (-0.92 per cent) and healthcare (-0.61 per cent).

Stocks

Mining stocks led the bear charge on the ASX yesterday. BHP Billiton Ltd (ASX:BHP) slumped 2.54 per cent to AU$30.33 (ex-dividend) and rival Rio Tinto Ltd (ASX:RIO) fell 1.16 per cent to AU$57.87. Fortescue Metals Group Ltd (ASX:FMG) lost 3.47 per cent to AU$1.95, the latter crashing through the AU$2.00 level for the first time February 2009. Atlas Iron Ltd (ASX:AGO) remained unchanged at AU$0.150, while Mount Gibson Iron Ltd (ASX:MGX) gained 2.33 per cent to AU$0.220 and BC Iron Ltd (ASX:BCI) was up 2.67 per cent to AU$0.385.

Gold miner Newcrest Mining Ltd (ASX:NCM) was down 1.05 per cent to AU$12.29 following the decline in gold prices to three month lows. Beadell Resources Ltd (ASX:BDR) plunged 5.77 per cent to AU$0.245, and was the second largest loser on the S&P/ASX 200.

Banks also contributed to the losses on the ASX. Commonwealth Bank of Australia (ASX:CBA) fell 0.18 per cent to AU$90.52, Westpac Banking Corp (ASX:WBC) was down 0.45 per cent to AU$37.50, Australia and New Zealand Banking Group (ASX:ANZ) dipped 0.23 per cent to AU$35.22 and National Australia Bank Ltd (ASX:NAB) slipped 0.53 per cent to AU$37.56.

Woodside Petroleum Ltd (ASX:WPL) was down sharply by 1.38 per cent to AU$34.41, Origin Energy Ltd (ASX:ORG) fell 1.70 per cent to AU$11.56, Santos Ltd (ASX:STO) remained unchanged at AU$7.33, while Oil Search Ltd (ASX:OSH) bucked the sector’s trend and was up 1.30 per cent to AU$7.80.

Amongst retailers, Woolworths Ltd (ASX:WOW) fell just 0.03 per cent to AU$29.35, Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, was down 0.11 per cent to AU$43.55 and Myer Holdings Ltd (ASX:MYR) plunged 3.85 per cent to AU$1.62.

Theme parks and gym owner Ardent Leisure Group (ASX:AAD), the top loser on the S&P/ASX 200, slumped over 19 per cent to AU$1.97 as investors and analysts took a dim view of the company’s appointment of Deborah Thomas, former editor-in-chief of the Australian Women’s Weekly, as chief executive, to succeed retiring Greg Shaw. “We are surprised by the announcement, particularly given Greg’s obvious commitment to and passion for the business,” said Morgans analyst Josephine Little, and quoted by The Australian. “We believe one of Greg’s key strengths was his ability to extract efficiencies and deliver a lean operating platform which enabled the businesses to deliver growth irrespective of market conditions.”

Economic news, currency and insight

The closely followed Westpac – Melbourne Institute Index of Consumer Sentiment showed a fall of 1.2 per cent in March to 99.5, coming back into negative territory after an encouraging rise into the black last month. February’s reading was 100.7, and the March figure means there are now more pessimistic households than optimistic ones financially, with 100 being the cut-off line, according to ABC. "Some softening in sentiment was always likely in March given the big lift last month following the RBA's surprise 25-basis-point rate cut," noted Westpac senior economist Matthew Hassan. "Interest rate moves often generate a big initial reaction that dissipates over time."

Data released by the Australian Bureau of Statistics showed that home loan approvals fell 3.5 per cent in January, while the value of loans owner occupiers declined 1 per cent, and loans to housing investors on the other hand fell just 0.1 per cent, according to The Australian. However, these figures may not yet reflect the effect of the February rate cut by the Reserve Bank of Australia. “This is just the calm before the storm,” CommSec economist Savanth Sebastian said. “The flow of credit to the housing sector would only have strengthened subsequent to that rate cut.”

The Australian Prudential Regulation Authority (APRA), however, is not so sanguine about loans to housing investors. Australia’s chief banking regulator called on banks to slow down loans to property investors as these are apparently overheating housing markets such as Sydney and Melbourne. APRA chairman Wayne Byres told The Australian he hoped investor lending growth would slow in coming months, and that “the next step in turning up the dial another notch would probably be to look at whether some across-the-board increase in capital requirements for particular sorts of lending might be needed,” he warned.

The Australian stock market is likely to open flat today given that the March ASX SPI200 Index (AP) Futures was up just 5 points at 5,791.0 at 06:59 this morning (AEDT).

The Australian dollar continues to trade at its lowest level in six years. At 07:25 this morning (AEDT), the local currency was trading at 75.92 US cents, down from 76.05 US cents yesterday, according to Business Spectator. Apart from the resurgent US dollar, the Australian currency was also weighed down by remarks from RBA assistant governor Christopher Kent who said more falls were needed for the currency. "While the depreciation seen to date will be helpful, our assessment is that our exchange rate remains relatively high given the state of our overall economy," he said.