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Category: Business, Economics and Finance / Company News / Markets / Currency / Futures / Stockmarket

ASX finishes lower as investors punish Telstra and banks

Thursday, 11 Aug 2016 16:03:08 | Justine Parker

City office-workers and passers-by watch the share market prices at the Australian Stock Exchange in Sydney on August 5, 2011. The Australian dollar is down almost two US cents as global markets continue to be pessimistic about the US economy and European government debt woes. (AAP: Tracey Nearmy)

The Australian share market has fallen for a second day in a row as investors punished Telstra and the big banks for their latest earnings reports.

Markets at 5:51pm (AEST)

  • ASX 200 +0.6% to 5,508, All Ords +0.5% to 5,599
  • Major gains: Mesblast +14.2% to $1.45, AHG +7% to $25.96, Oz Minerals +4.2% to $6.64
  • Major losses: AMP -3.8% to $5.65, Qube -3.3% to $2.68, Santos -2.8% to $4.55
  • Futures: Euro STOXX 600 flat at 342.7, FTSE +0.1% to 6,817, S&P 500 +0.1% to 2,174
  • AUD: 77.1 US cents, 59.4 British pence, 78 Japanese yen, 69.1 euro cents, $NZ1.064

Bank stocks were the biggest drag on the market as Westpac reported a rise in mortgage delinquencies and more stressed businesses loans due to the slump in mining investment.

The bank said mortgage delinquencies have risen in Western Australia, South Australia and Queensland; at the same time it is facing stress on big loans to mining-related companies and in the New Zealand dairy sector.

Westpac fared worst of the big banks, tumbling to a three-week intraday low before recovering slightly to close down 2.6 per cent at $30.02.

ANZ and NAB both lost 1 per cent while the Commonwealth Bank fell by 1.9 per cent.

Elsewhere, Telstra dumped 1.6 per cent to one-month lows of $5.51 after revealing a near 37 per cent jump in full-year net profit to $5.8 billion, which was in line with guidance and analyst expectations.

Australia's biggest telecommunications provider also announced a $1.5 billion share buyback and vowed to spend $3 billion over three years improving its network, after a series of major outages over the last year.

Energy stocks were also sold as the oil price continued to fall in Asian trade after big losses overnight; Santos lost 2.8 per cent.

Among cyclical stocks, discount electronics retailer JB Hi-Fi closed 2.1 per cent higher at $27 after the Australian Competition and Consumer Commission said it would not oppose the company's proposed buyout of the electrical appliances chain The Good Guys.

The regulator said the deal is unlikely to substantially reduce competition as the firms generally focus on different products.

In currency trade, bets the US Federal Reserve will not raise interest rates this year have weakened the US dollar, sending the Australian currency to a three-month high overnight, despite last week's interest rate cut.

The Australian dollar has since settled back a touch and was buying about 77.1 US cents.

The New Zealand dollar also strengthened to a one-year high against the greenback after its central bank cut interest rates earlier today.

In commodities trade, oil prices were down again on concerns about oversupply with Brent crude 0.3 per cent lower at about $US43.91 a barrel, while spot gold also weakened to about $US1,343 an ounce.

AustraliaPlus


 

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