profit booking and chinese trade data trip up the asxs record run 994472015

The Australian stock market took a break from its stellar 12-session winning streak, its longest on record, as Friday’s profit booking trend spilled over into Monday, driving the market down by 0.1 per cent.

Unexpectedly weak trade data out of China, which is Australia’s most significant trading partner, weighed on stocks, particularly the resource sector, while the political environment in Australia deteriorated. The market also chose to be cautious given that some of the biggest stocks would be reporting earnings during the week. Continuing uncertainty on how the crisis regarding Greece’s debt would resolve also took a toll on investor sentiment.

Nevertheless, the S&P/ASX 200 traded the day in a saucer pattern, and bottomed out between 2 and 3 PM, at 5,780. A rally thereafter retrieved much of the day’s losses, but was not enough for the index to push into positive territory.

Indices and sectors

The benchmark S&P/ASX 200 ended down by 5.3 points, or 0.1 per cent, at 5,814.9, while the broader All Ordinaries index fell 4.6 points, or 0.1 per cent, to 5,770.1.

The best performing sectors were healthcare (+1.87 per cent), information technology (0.37 per cent) and energy (+0.2 per cent). Losing sectors were telecommunications (-1.18 per cent), materials (-0.70 per cent) and consumer staples (-0.50 per cent).

Stocks

In the resource sector, BHP Billiton Ltd (ASX:BHP) fell 1 per cent to AU$31.23, Rio Tinto Ltd (ASX:RIO) shed 0.5 per cent to AU$60.31 and Fortescue Metals Group Ltd (ASX:FMG) lost 1.57 per cent to AU$2.50. Though Atlas Iron Ltd (ASX:AGO) gave up 2.56 per cent to AU$0.19, BC Iron Ltd (ASX:BCI) was a standout gainer in the space, surging 5.22 per cent to AU$0.61. Arrium Ltd (ASX:ARI) was the biggest loser on the S&P/ASX 200, down 2.3 per cent to AU$0.205.

Gold miners were on the back foot following the plunge in gold prices. Beadell Resources Ltd (ASX:BDR), one of the biggest losers on the S&P/ASX 200, plunged 4.69 per cent to AU$0.305, while Northern Star Resources Ltd (ASX:NST) was off 3.54 per cent to AU$1.91. Newcrest Mining Ltd (ASX:NCM) fell 2.46 per cent to AU$13.88.

In energy stocks, Woodside Petroleum Ltd (ASX:WPL) gained 0.5 per cent to AU$35.67, Santos Ltd (ASX:STO) lost 0.25 per cent to AU$8.78 and Oil Search Ltd (ASX:OSH) was up 0.12 per cent to AU$8.29. The sector was up marginally in response to better oil prices following a more optimistic forecast on Monday from OPEC, according to The Australian.

The big banks closed mixed. Westpac Banking Corp (ASX:WBC) was up 0.24 per cent to AU$37.05 and Australia and New Zealand Banking Group (ASX:ANZ) gained 0.23 per cent to AU$34.98. On the other hand, National Australia Bank Ltd (ASX:NAB) slipped 0.03 per cent to AU$37.20 and Commonwealth Bank of Australia (ASX:CBA) was down 0.05 per cent to AU$92.93.

Amongst the retail stocks, Woolworths Ltd (ASX:WOW) lost 0.6 per cent to AU$32.33 and Wesfarmers Ltd (ASX:WES) was down 0.7 per cent to AU$44.45.

Blue-chip Telstra Corporation Ltd (ASX:TLS) slipped 1.21 per cent to AU$6.51.

Economic news, currency and insight

In a sign that the Australian labour market may be finding its feet, ANZ’s widely followed job ads series was up 1.3 per cent during January and higher by 10 per cent compared to the year ago, according to ABC. Newspaper job ads, which constitute just 3 per cent of the total number of ads, fell 6.7 per cent in January, while internet job ads rose 1.5 per cent. An analysis of the newspaper job ads showed that NSW was leading Australia’s jobs market.

"A gap between job ads and the official data remains, however, most likely reflecting a higher rate of retrenchments in industries such as manufacturing and resources, which suggests that overall labour demand is struggling to keep pace with the flow of new workers into the economy," said ANZ's chief economist Warren Hogan. "We do not expect a significant change in this dynamic amidst below trend economic growth outcomes, with a further rise in the unemployment rate to 6½ per cent through 2015."

The Organisation for Economic Cooperation and Development (OECD) said Monday that governments have been dragging their feet on the overhauls needed to boost economic growth in recent years. In a report titled “Going for Growth,” the tenth in the series, the OECD warned that the growth potential of most developed economies had weakened, while a protracted period of stagnation lay ahead for others, according to the Wall Street Journal.

Speculation on Greek’s exit from the eurozone mounted after former US Fed Chairman Alan Greenspan said on the BBC: “I don’t see that it helps them to be in the euro, and I certainly don’t see that it helps the rest of the eurozone, and I think it is just a matter of time before everyone recognises that parting is the best strategy.”

The fiery rhetoric from Greek Prime Minister Alex Tsipras, backed up by Finance Minister Yanis Varoufakis, triggered a more than 5 per cent fall in Greek stocks on Monday. Overnight, stocks on Wall Street also ended down – The Dow Jones Industrial Average fell 95.08 points, or 0.53 percent, to 17,729.21, the S&P 500 lost 8.73 points, or 0.42 percent, to 2,046.74 and the Nasdaq Composite dropped 18.39 points, or 0.39 percent, to 4,726.01, according to Reuters.

Overnight the Australian dollar remained firm despite falling iron ore prices and weakness across global share markets, according to the Business Spectator. National Australia Bank senior economist David de Garis said the Aussie was boosted by a weaker US dollar. "In currency markets, the US dollar has eased back somewhat," Mr de Garis said. At 09:12 this morning (AEDT), the Aussie was trading at 78.00 US cents.