the asx falls 0 5 per cent on the greek crisis earnings reports and weak banks 1031932015

The benchmark S&P/ASX 200 stock index was volatile in the initial hour of trade but lost ground throughout the rest of the session after two attempts to take out the 5,880 level between 11 AM and 12 PM failed. The index closed near its worst levels of the day.

The market was impacted by a host of bearish factors such as the failure of the Greek talks, a glum prognosis of the Australian economy in the RBA minutes and some disappointing company earnings reports including Fortescue Metals Group Ltd (ASX:FMG) and Australia and New Zealand Banking Group (ASX:ANZ). Another factor was the decline in the price of Commonwealth Bank of Australia (ASX:CBA) after the stock went ex-dividend.

Investors may also have decided to book profits considering the market’s strident rise over the last three weeks.

Indices and sectors

The benchmark S&P/ASX 200 fell 30.5 points, or 0.5 per cent, and closed at 5,858.2, while the broader All Ordinaries index declined 27.2 points, or 0.5 per cent, to 5,822.3.

The top gaining sectors were consumer staples (+1.17 per cent) and utilities (+1.08 per cent). The main losers were information technology (-1.53 per cent), financials (-1.14 per cent) and industrials (-0.73 per cent).

Stocks

Amongst the miners, BHP Billiton Ltd (ASX:BHP) fell 0.03 per cent to $32.55 and Rio Tinto Ltd (ASX:RIO) was down 0.08 per cent to AU$63.50. Fortescue Metals Group Ltd (ASX:FMG) plunged 4.85 per cent to AU$2.55 after its first-half profit fell by 81 per cent. Smaller iron ore miners were particularly hard hit with Atlas Iron Ltd (ASX:AGO) down 4.76 per cent to AU$0.200 and BC Iron Ltd (ASX:BCI) gave up 5.08 per cent to AU$0.560. Mount Gibson Iron Ltd (ASX:MGX), one of the largest losers on the S&P/ASX 200, lost 6.25 per cent to AU$0.225 after it reported a loss of AU$870 million resulting from a AU$946 million write-down.

The four big banks closed mixed. Australia and New Zealand Banking Group (ASX:ANZ) lost 2.45 per cent AU$34.99 and Commonwealth Bank of Australia (ASX:CBA), which turned ex-dividend, was down 1.63 per cent at AU$90.00. Westpac Banking Corp (ASX:WBC) gained just 0.05 per cent to AU$37.67 and National Australia Bank Ltd (ASX:NAB) was up 0.16 per cent to AU$37.56.

Macquarie Group Ltd (ASX:MQG) was one of the top gainers on the S&P/ASX 200, rising by 3.53 per cent to AU$70.90, after announcing that it was on track to achieve its best profit since after the financial crisis. "While the impact of future market conditions makes forecasting difficult, we expect the full-year 2015 combined net profit contribution from operating groups to be significantly up on full-year 2014, more than offsetting the full-year 2014 realised gain relating to the Sydney Airport distribution," Macquarie guided, according to The Sydney Morning Herald.

Amongst energy stocks, Woodside Petroleum Ltd (ASX:WPL) lost 0.74 per cent to AU$34.91, Santos Ltd (ASX:STO) gained 1.36 per cent to AU$8.18 and Oil Search Ltd (ASX:OSH) advanced 0.96 per cent to AU$8.40.

In breaking news this morning, Woodside Petroleum Ltd (ASX:WPL) said its full-year net profit jumped 38 per cent driven by record revenues despite challenging market conditions due to the slump in oil prices, according to The Sydney Morning Herald. The company declared a record, better-than-expected final dividend of US$1.44 per share (AU$1.84), higher by 40 per cent compared to the year earlier.

Domino's Pizza Enterprises Ltd (ASX:DMP) gained 0.08 per cent to AU$35.92, Telstra Corporation Ltd (ASX:TLS) was flat at AU$6.58 and Qantas Airways Ltd (ASX:QAN) was down 0.38 per cent to AU$2.63.

Coca-Cola Amatil Ltd (ASX:CCL), which was the second biggest gainer on the S&P/ASX 200, vaulted 6.31 per cent to AU$10.61 after the company announced that its full-year profit more than tripled to AU$272.1 million in 2014 compared to AU$79.9 million in 2013, in which year it booked a large impairment charge.

Economic news, currency and insight

The Reserve Bank of Australia published the minutes of the February board meeting at which it cut interest rates to a record low of 2.25 per cent. The minutes revealed that the bank was driven to cut interest rates in the light of data that showed the Australian economy was not performing as well as previously thought, according to The Sydney Morning Herald.

However, the bank remained worried about rising housing prices, particularly in Sydney and Melbourne, as well as the noticeable faster rate of growth in investor credit than owner-occupier housing credit. “Given the large increases in housing prices in some cities and ongoing strength in lending to investors in housing assets, members also agreed that developments in the housing market would bear careful monitoring,” said the RBA.

The RBA clarified the rationale for its surprise decision to cut rates at its February meeting. “In deciding the timing of such a change, members assessed arguments for acting at this meeting [February] or at the following meeting," the bank stated in its minutes, according to The Sydney Morning Herald. "On balance, they judged that moving at this meeting, which offered the opportunity of early additional communication in the forthcoming Statement on Monetary Policy, was the preferred course."

According to analysts, though the minutes did not offer any light on another interest rate cut in the March meeting, given the state of the Australian economy, the RBA might well decide to take such a step.

The ANZ-Roy Morgan’s weekly consumer confidence index fell 1.7 per cent to its worst level since August, and well below its long-run average of 112.8 amidst concerns about job security and weak wages growth, said the Business Spectator. “While we expect some bounce in coming months from lower interest rates, the question we increasingly debate is whether there can be a strong and sustained bounce in consumer confidence without an improvement in the labour market and a lift in wages growth,” said ANZ Chief Economist Warren Hogan.

On Wall Street overnight, the S&P 500 rose to a fresh all-time high of 2,100.34 as investors factored in a likely easing in the Greek debt crisis, and the energy sector benefited from rising crude oil prices. According to Bloomberg, the Greek government may request an extension of its own agreement for six months, a step that could break the current deadlock with its international creditors.

Australian stocks are likely to open in the black today considering the March ASX SPI200 Index (AP) Futures as trading higher by 23 points at 5843.0 at 07:59 this morning (AEDT).