the failure of greece negotiations weighs on australian stocks 1573802015

A positive show by the big Australian banks helped shore up stock prices even as investors fretted over the failure of weekend talks between Greece and its creditors and the energy sector ending lower by nearly 2 ½ per cent.

The S&P/ASX 200 slumped in the very first hour of trade to the day’s worst level of 5,492.10. However, prices formed a classic inverted head and shoulders technical pattern and reversed higher from that point, clawing back most of the losses.

Indices and sectors

The benchmark S&P/ASX 200 fell 6.5 points, or 0.1 per cent, and closed at 5,538.8, while the broader All Ordinaries index was down 10.6 points, or 0.2 per cent, at 5,541.5.

The sectors that closed with gains were financials (+0.27 per cent), industrials (+0.23 per cent) and real estate investment trusts (+0.09 per cent). The losing sectors included energy (-2.42 per cent), utilities (-1.19 per cent), telecommunications services (-0.64 per cent) and consumer staples (-0.46 per cent).

Stocks

Energy was by far the biggest losing sector on Monday. Woodside Petroleum Limited (ASX:WPL) plunged 2.89 per cent to AU$35.67, Santos Ltd (ASX:STO) was down 2.64 per cent to AU$8.12, Oil Search Limited (ASX:OSH) declined 2.72 per cent to AU$7.52 and Origin Energy Ltd (ASX:ORG) was down 0.54 per cent to AU$12.87.

In mining stocks, BHP Billiton Limited (ASX:BHP) rose 0.07 per cent to AU$27.92 and Rio Tinto Limited (ASX:RIO) gained 0.26 per cent to AU$57.29. However, Fortescue Metals Group Limited (ASX:FMG) fell 0.81 per cent to AU$2.44 and BC Iron Limited (ASX:BCI) slid 5.33 per cent to AU$0.355.

The major banks all closed with gains. National Australia Bank Ltd. (ASX:NAB) was up 0.84 per cent to AU$32.53, Westpac Banking Corp (ASX:WBC) gained 0.16 per cent to AU$31.72, Commonwealth Bank of Australia (ASX:CBA) was up 0.58 per cent to AU$81.89 and Australia and New Zealand Banking Group (ASX:ANZ) ended higher by 0.44 per cent at AU$31.85.

In telecom, Telstra Corporation Ltd (ASX:TLS) lost 0.66 per cent to close at AU$5.99, M2 Group Ltd (ASX:MTU) shed 0.65 per cent to AU$10.76, TPG Telecom Ltd (ASX:TPM) fell 0.46 per cent to AU$8.60 and iiNet Limited (ASX:IIN) bucked the trend, gaining 0.26 per cent to end at AU$9.585. Ten Network Holdings Limited (ASX:TEN) agreed to sell a stake of up to 15 per cent to cable TV provider Foxtel for AU$77 million, and said it would raise another AU$77 million through the issue of new shares to existing shareholders. The new shares, both to Foxtel and existing investors, would be issued at AU$0.15 each. The stock fell 1.89 per cent to AU$0.26.

Retailer Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, ended off by 0.14 per cent at AU$41.11 and Woolworths Limited (ASX:WOW) was down 0.63 per cent to AU$26.76. However, wholesale supplier Metcash Limited (ASX:MTS) gained 2.26 per cent to AU$1.13 after the company announced the sale of its automotive division for AU$275 million to automotive parts supplier Burson Group.

Economic news, currency and market outlook

RBA assistant governor Christopher Kent said in Canberra that property prices in Sydney could rise further given that low interest rates would boost land prices, even as available land for development shrunk. "In some cities, stocks of unsold lots suitable for development appear to be unusually low," he said, as quoted by ABC. "Shortages are most evident in Sydney, where greenfield land releases have not kept pace with recent strong demand.”

On Wall Street on Monday, stocks fell as fears loomed large of a Greek default. The Dow Jones Industrial Average fell 107.67 points, or 0.6 percent, to 17,791.17, the S&P 500 lost 9.68 points, or 0.46 percent, to 2,084.43 and the Nasdaq Composite dropped 21.13 points, or 0.42 percent, to 5,029.97.

The Australian dollar is currently trading higher driven largely by weakness in the greenback due to disappointing economic data, according to the Business Spectator. At 07:00 this morning (AEST), the Aussie was trading at 77.66 US cents, up from 77.32 US cents on Monday.

The Australian stock market is likely to open lower today given that at 6.45am (AEST) this morning the June ASX SPI200 Index (AP) Futures was down 5 points at 5,538.