Australia Market falls on weak offshore cues

Headline indices of the Australia stock market closed lower on Monday, 30 July 2018, tracking losses seen on Wall Street last session on Friday and on caution ahead of the policy statement of Bank of Japan's two-day meeting due on Tuesday and the Federal Reserve's meeting later this week. Except consumer staples and telecom, all ASX sectors declined, with shares in financial, industrial, information technology, and healthcare issues being notable losers. At closing bell, the benchmark S&P/ASX 200 Index declined 21.84 points, or 0.35%, to 6,278.39. The broader All Ordinaries Index fell 22.72 points, or 0.36%, to 6,368.77.

Wall Street took a hit at the end of last week after major technology firms' earnings reports missed estimates, which led to sharp declines in other stocks. The Dow fell 76.01 points or 0.3% to 25,451.06, the Nasdaq plunged 114.77 points or 1.5% to 7,737.42 and the S&P 500 slid 18.62 points or 0.7% to 2,818.82.

 

Investors are closely watching the Bank of Japan's two-day meeting starting Monday, with widespread speculation about whether the central bank may be looking to alter its ultra-loose monetary policy. The BoJ has engaged in massive bond-buying as part of a programme to push the country's inflation rate up to 2.0%, seen as necessary to turbo charge the world's third-largest economy.

The US Federal Reserve meets on Tuesday and Wednesday and is widely expected to stand pat while reaffirming the outlook for further gradual rate rises. The market is almost fully priced for a hike in September and leaning toward a further move before year-end.

Shares of banks and financial companies were down, with 'Big Four' ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac - were lower in a range of 0.5% to 0.9%. Wealth manager AMP jumped more than 5%, regaining almost all of its losses from Friday when it flagged its financial impact from the Royal Commission inquiry into financial sector misconduct.

Shares of materials sectors were down, with South32 and Rio Tinto were the biggest drags, falling 1.7% and 1%, respectively. Global miner BHP edged lower with a labour strike at its Escondida mine in Chile almost inevitable.

Oil stocks were weak after crude oil prices declined more than 1% on Friday. Santos, Oil Search, and Woodside Petroleum were lower in a range of 0.2% to 0.5%.

Shares of healthcare were down, with ResMed down almost 3% ahead of earnings result on Thursday, while Healthscope declined after agreeing to sell its Asian pathology business in Singapore, Malaysia and Vietnam for A$279m to a private equity firm.

Ardent Leisure (AAD) shares were down by 4%. The owner of Dreamworld warned of a A$91-A$95m loss from its theme park division and lower profits from its entertainment centres in the US.

CURRENCY NEWS: The Australian dollar was rangebound against greenback and other major currencies after softer than expected US GDP data announcement and with investors focused on monetary policy meetings by the BoJ and other central banks this week. The Australia dollar was at 73.98 US cents at 1200 AEST, just up from 73.88 US cents on Friday and after having ranged above 74 US cents over the weekend.

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