mining stocks and a healthcare debacle dent the australian benchmark asx 200 stock index 1423212015

The sharp jump in the value of the Australian dollar led to a minor loss on the local stock exchange, and put a brake on the bullish run from the previous two sessions.

Falling iron ore prices pressured mining companies, the health sector suffered from a sharp plunge in ResMed Inc. (CHESS) (ASX:RMD), and the big banks all met with investor apathy.

Indices and sectors

The benchmark S&P/ASX 200 on Thursday fell 18.5 points, or 0.3 per cent, and closed at 5,696.6, while the broader All Ordinaries index was down 18.3 points, or 0.3 per cent, at 5,692.5.

The best gaining sectors were consumer staples (+0.57 per cent), real estate investment trusts (+0.42 per cent) and consumer discretionary (+0.18 per cent). The main losing sectors were healthcare (-1.22 per cent), materials (-1.19 per cent) and financials (-0.24 per cent).

Stocks

Mining stocks played a big role in yesterday’s losses. BHP Billiton Limited (ASX:BHP) fell sharply by 1.63 per cent to AU$31.97, Rio Tinto Limited (ASX:RIO) was down 2.24 per cent to AU$57.70, and Fortescue Metals Group Limited (ASX:FMG) plunged 7.97 per cent to AU$2.31. Mount Gibson Iron Limited (ASX:MGX) was unchanged at AU$0.250 and BC Iron Limited (ASX:BCI) fell 4.35 per cent to AU$0.440. Recent falls in the price of iron ore, and a sharp jump in the Australian dollar has crimped profitability at iron ore exporters. Gold miner Newcrest Mining Limited (ASX:NCM) jumped 1.61 per cent to AU$14.51 led by rising gold prices.

In healthcare, ResMed Inc. (CHESS) (ASX:RMD) crashed 18.42 per cent to AU$6.73 after a company trial found that one of its devices increased the risk of death for patients, according to The Australian.

Energy stocks closed mixed. Woodside Petroleum Limited (ASX:WPL) was higher by 0.84 per cent at AU$35.00, Origin Energy Ltd (ASX:ORG) was unchanged at AU$13.10, Oil Search Limited (ASX:OSH) fell 1.69 per cent to AU$7.58 and Santos Ltd (ASX:STO) shed 0.92 per cent to AU$8.63.

The major banks however all ended up in the red. Commonwealth Bank of Australia (ASX:CBA) slipped 0.43 per cent to AU$83.62, Westpac Banking Corp (ASX:WBC) was down 0.72 per cent to AU$33.03, National Australia Bank Ltd. (ASX:NAB) fell 0.45 per cent to AU$35.49 and Australia and New Zealand Banking Group (ASX:ANZ) dipped 0.27 per cent to AU$33.02.

Supermarkets and retail had a mixed day. Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, was up 0.95 per cent to AU$44.57, Woolworths Limited (ASX:WOW) rose 0.28 per cent to AU$28.58, Caltex Australia Limited (ASX:CTX) fell 0.43 per cent to AU$32.66 and Myer Holdings Ltd (ASX:MYR) dipped 2.57 per cent to AU$1.51.

In telecommunications, Telstra Corporation Ltd (ASX:TLS) and TPG Telecom Ltd (ASX:TPM) were unchanged at AU$6.15 and AU$9.00 respectively, while M2 Group Ltd (ASX:MTU) fell 1.72 per cent to AU$10.85 and iiNet Limited (ASX:IIN) fell 0.40 per cent to AU$9.84.

Airlines continued their bullish turn, with Qantas Airways Limited (ASX:QAN) jumping 2.79 per cent to AU$3.68 and Virgin Australia Holdings Ltd (ASX:VAH) up 1.02 per cent at AU$0.495.

Economic news, currency and insight

Research released yesterday by leading ratings agency Moody’s said Australian banks could be exposed to a future fall in housing prices, though they appear to be relatively safe the present. "Australia's housing market risks are skewed towards the downside," Moody's said. "Elevated and rising house prices are intensifying imbalances in the housing market," and cited the massive jump in lending to housing investors, especially in Sydney, as one of those imbalances, according to ABC. The agency observed that while in the 1990s the average wage earner could save enough to make a deposit on a typical capital city house in just 4 to 6 years, it now takes them 14 years to save enough for that deposit. The reasons cited for this are very high house prices, lower income growth and low interest rates on deposits.

In a revamped Significant Investor Visa to be released today, the federal government will require foreigners seeking to acquire Australian citizenship to invest AU$2.5 million in the country’s start-up and emerging companies, according to Business Spectator. “Australian permanent residency is a great privilege — and the Government believes this warrants more dynamic investment in areas of the economy that will drive innovation and makes a difference,” said Investment and Trade Minister Andrew Robb.

On Wall Street, stocks jumped sharply higher driven by a weak US dollar and diminishing apprehensions on a Fed rate hike, according to Reuters. The S&P 500 gained 22.62 points, or 1.08 per cent, to close at a record high of 2,121.1. "There's a 50-50 chance they're not going to raise rates this year, so why are we spending two years discussing this? Let’s focus on the fact that the economy is doing okay,” said Steve Goldman, principal of Goldman Management in Short Hills, New Jersey, and quoted by Reuters. "The path of least resistance is higher.” The Dow Jones Industrial Average rose 191.75 points, or 1.06 percent, to end at 18,252.24. The Nasdaq Composite added 69.10 points, or 1.39 percent, to 5,050.80.

The Australian dollar was weakened by profit-taking and positive weekly jobless data that pointed to a firming US labour market, according to Business Spectator. At 07:10 this morning (AEST), the Australian dollar was trading at 80.81 US cents, down from 81.27 US cents on Thursday.

The Australian stock market is likely to open higher today given that at 6.50 am (AEST) today, the June ASX SPI200 Index (AP) Futures was up by 39 points at 5,726.