australias asx 200 ends mostly unchanged energy and miners drag 902762014

As China restructures, international investors prefer other markets to Australia

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By :  ,  Financial Analyst

The Australian stock market closed virtually flat yesterday though energy stocks underperformed, and banks did well. The S&P/ASX 200 benchmark index closed at 5400.90, up just 4.7 points, or 0.1 per cent.

The top five gainers in the index were ALS Ltd (ASX:ALQ) (AU$5.14, +4.26 per cent), Asaleo Care Ltd (ASX:AHY) (AU$1.96 +3.43 per cent), Greencross Limited (ASX:GXL) (AU$8.47, +3.29 per cent), Whitehaven Coal Limited (ASX:WHC) (AU$1.30, +3.17 per cent) and Ozforex Group Ltd (ASX:OFX) (AU$2.65, +3.11 per cent).

The biggest losers were Mount Gibson Iron Limited (ASX:MGX) (AU$0.00 -100 per cent), Ainsworth Game Technology Limited (ASX:AGI) (AU$2.24, -7.82 per cent), Evolution Fpo (ASX:EVN) (AU$0.57, -6.56 per cent), Beadell Resources Ltd (ASX:BDR) (AU$0.22, -6.38 per cent), and Domino's Pizza Enterprises Ltd. (ASX:DMP) (AU$24.38, -6.05 per cent).

The energy sector was weak and fell 2.8 per cent, as crude oil prices fell to new lows in a growing realisation that OPEC may not cut production. In a post-market close development, OPEC said in a statement that it “decided to maintain the production level of 30 million barrels per day,” according to The Australian.

The decision triggered a sharp cut in oil prices, with Brent crude falling below US$72 a barrel at one point, touching lows last seen in August 2010.

Matt Sherwood, head of equities at Perpetual said Australia’s stock market was currently unappealing to international investors because earnings growth and valuations were less favourable compared to other markets such as the United States, Europe and Japan, according to The Sydney Morning Herald. "Chinese authorities are trying to focus more now on the consumer space, which, of course, Australia is less favourably exposed there," Mr Sherwood said, in the light of Australia’s predominantly resource-oriented trade with China.

The Australian quoted NSW mining sources saying that the recent move by Glencore PLC (LON:GLEN) to shut down production at some coal mines in the country was a fallout of lower Chinese coal prices, partly due to import tariffs on Australian coal. Miners BHP Billiton Limited (ASX:BHP) closed at AU$32.00, down 1.63 per cent, while Rio Tinto Limited (ASX:RIO) shut trade at AU$58.02, losing 0.6 per cent.

Woolworths Limited (ASX:WOW) reaffirmed its guidance for growth of 4-7 per cent in profit after tax, even though the stock has fallen 14 per cent over the past month, says The Australian. “The market appears to have drawn conclusions about the company’s outlook that the board does not share,” said Chairman Ralph Waters at the company’s annual general meeting yesterday.

Shares in newly listed IPO Medibank Private Ltd (ASX:MPL) jumped 3.8 per cent to close at $2.18, after a mixed first few days of trade.

Find up to date information on the ASX at City Index.

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