Australia Market falls on first trading day of the new financial year

Headline indices of the Australia stock market ended down on Monday, 02 July 2018, the first trading day of the new financial year, as risk averse investors offloaded issues amid ongoing global trade tensions. Most of investors opted to stay on sideline ahead of the outcome of Tuesday's Reserve Bank of Australia policy meeting, where the central bank is likely to hold rates. Most of ASX issues were lower, with shares in energy, mining and financial stocks being notable losers, however, strength in the healthcare, industrials, and realty stocks kept the benchmark losses in check. The benchmark S&P/ASX 200 Index advanced 5.11 points or 0.1% to 6,220.50. The broader All Ordinaries Index was up 8.41 points or 0.1% to 6,314.20. The benchmark S&P/ASX200 index closed 16.8 points, or 0.27 per cent, lower at 6,177.8 points, while the broader All Ordinaries index ended down 16.4 points, or 0.26 per cent, at 6,273.3 points.

Rising stocks outnumbered declining ones on the Sydney Stock Exchange by 663 to 541 and 369 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was up 9.27% to 13.645 a new 1-month high.

 

Shares of energy sector declined the most in the benchmark index, with Woodside Petroleum, Origin Energy and Santos all ending in the red.

The major miners were also lower, with mining companies BHP Billiton, Newcrest Mining and BlueScope Steel were notable losers after China's the latest manufacturing data - a survey of purchasing managers' activity - was softer than expected for June 2018.

Financials were also traded lower, with the country's biggest lender Commonwealth Bank of Australia leading retreat, down 0.2%, hit with a class action lawsuit, which accused the bank of failing to disclose widespread breaches of anti-money-laundering rules.

Sigma Healthcare shares plunged 40 per cent to 48.75 cents after the company announced it had lost its contract to supply the Chemist Warehouse discount chemist chain from mid-2019. The company also announced a cut to its earnings guidance, saying 2018/19 underlying earnings will be A$75 million for the current year, down from A$90 million, and falling to A$40 million and A$50 million.

ECONOMIC NEWS: Australia AiG Manufacturing Sector Decelerates In June -- Australia manufacturing sector continued to expand in June, with a Performance of Manufacturing index score of 57.4, the Australian Industry Group said on Monday. That's down from the downwardly revised 57.5 in May (originally 57.7), although it remains well above the boom-or-bust line of 50 that separates expansion from contraction. It marks the 21st straight month of expansion.

CURRENCY NEWS: The Australian dollar lost ground following the release of softer than expected China's PMI data. At 1700 AEST, the Australian dollar was trading at 73.78 US cents, slightly down from 73.89 US cents on Friday.

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