greece and the chinese stock markets continue to pressure australian shares 1663142015

Australian stocks opened the week with heavy losses following the Greek referendum which showed that the country’s population was not in favour of austerity measures, raising the likelihood that a deal with creditors would now be more difficult, and likely lead to Greece’s exit from the Eurozone. The continuing weakness in the Chinese stock markets, despite measures by the government to stem losses, also weighed on investor sentiment. Fresh losses in commodities such as iron ore and crude oil also take a toll.

Indices and sectors

The benchmark S&P/ASX 200 fell 63.3 points, or 1.2 per cent, and closed at 5,475, while the broader All Ordinaries index was down 64.7 points, or 1.2 per cent, at 5,463.3.

The big losing sectors were energy (-2.58 per cent), materials (-1.16 per cent), consumer discretionary (-1.66 per cent), information technology (-1.48 per cent), industrials (-1.37 per cent) and consumer staples (-1.35 per cent). There were no gaining sectors for the second successive day.

Stocks

Falling prices of iron ore and crude oil continued to slam stocks in the mining and energy sectors. BHP Billiton Limited (ASX:BHP) fell over 2 per cent to AU$26.01 and Rio Tinto Limited (ASX:RIO) was down 2.55 per cent to AU$51.16. Fortescue Metals Group Limited (ASX:FMG) plunged 5.77 per cent to AU$1.72 and was the third biggest loser on the S&P/ASX 200. Steelmaker BlueScope Steel Limited (ASX:BSL) crashed 7.8 per cent to AU$3.31 and was the top loser.

In energy, Woodside Petroleum Limited (ASX:WPL) fell 1.84 per cent to AU$34.12, Origin Energy Ltd (ASX:ORG) was down sharply by 3.66 per cent to AU$11.32, Oil Search Limited (ASX:OSH) lost nearly 4 per cent to AU$6.79 and Santos Ltd (ASX:STO) declined 3.37 per cent to AU$7.74.

Though the big banks all ended in the red, their percentage losses were far less compared to other sectors. Commonwealth Bank of Australia (ASX:CBA) slipped 0.42 per cent to AU$86.30, Westpac Banking Corp (ASX:WBC) was down 0.82 per cent to AU$32.49, Australia and New Zealand Banking Group (ASX:ANZ) fell 0.77 per cent to AU$32.21 and National Australia Bank Ltd. (ASX:NAB) declined 0.71 per cent to AU$33.47.

In retail stocks, Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, gave up 0.86 per cent to AU$39.41, Woolworths Limited (ASX:WOW) lost 1.77 per cent to AU$27.14, and Myer Holdings Ltd (ASX:MYR) shed 3.56 per cent to AU$1.22. However, Caltex Australia Limited (ASX:CTX) bucked the trend, gaining 0.59 per cent to AU$32.54. Kathmandu Holdings Ltd (ASX:KMD), which lost 6.21 per cent to AU$1.43, was the second-biggest loser on the S&P/ASX 200.

Economic news, currency and market outlook

A survey of 14 economists conducted by AAP showed that none expected the Reserve Bank of Australia to change interest rates at its July meeting, and only two thought there could be another cut by the end of the year, according to The Australian.

ANZ job advertisements series showed that job listings rose by 1.3 per cent in June, making it the 20th successive month that job ads have increased. However, the pace of the growth has slowed in recent months, and this, according to ANZ senior economist Justin Fabo, might reflect in a gradually rising unemployment rate, according to ABC.

Greek finance minister Yanis Varoufakis resigned shortly after the country’s referendum which showed an overwhelming proportion of the population were not in favour of austerity measures. Varoufakis said on his personal blog that he resigned because he was disliked by representatives of the creditor countries, and because he wanted to ease the negotiation process for Greek Prime Minister Alexis Tsipras.

Stocks closed lower on Wall Street after Greece rejected the terms of the bailout in its national referendum and the energy sector fell sharply on account of the decline in crude prices. The Dow Jones Industrial Average fell 46 points, or 0.3 percent, to 17,683. The S&P 500 index gave up eight points, or 0.4 percent, to 2,068. The Nasdaq Composite fell 17 points, or 0.3 percent, to 4,991.

The Australian dollar is trading lower though slightly above the six-year lows touched on Monday. According to the Business Spectator, at 07:10 this morning (AEST) the local currency was trading at 74.96 US cents, down from 75.11 US cents on Monday.

The Australian stock market is likely to open higher today given that at 06:45 am (AEST) this morning the September ASX SPI200 Index (AP) Futures was up 21 points at 5,453.