The Australian share market closed lower as investors expect a summit of European Union leaders this week to achieve little in solving the eurozone’s ongoing problems.
At 1615 AEST on Monday, the benchmark S&P/ASX200 index had fallen 20.4 points, or 0.5 per cent, to 4,027.8 points, while the broader All Ordinaries index lost 21.8 points, or 0.53 per cent, to 4,072 points.
On the ASX24, the September share price index futures contract had shed ten points to 3,991 points, with 29,911 contracts traded, according to preliminary calculations.
IG Markets market analyst Cameron Peacock said local investors had ignored a rebound in US markets on Friday and were looking towards the EU summit on June 28-29 in Brussels.
“I think there’s a lot of caution, a lot of scepticism ahead of that,” Mr Peacock said.
“We’ve had numerous summits over the last two years and they’re never really amounted to anything.”
Mr Peacock said the EU summit reflected all that was wrong with Europe: ideological division; debt-laden Greece’s continuing demands for concessions and Germany’s opposition to that; and more questions on how the recapitalisation of Spain’s troubled banks would work.
Mr Peacock said another contributing factor to Monday’s market fall was that small stocks were being sold off ahead of the end of the financial year.
“I think we’re just going to idle around, slowly drift lower – it’s going to be a bit of a painfull week,” he said.
In the resources sector, global miner BHP Billiton fell 45 cents to $31.07, and Rio Tinto reversed 12 cents to $55.90.
Among the major banks, National Australia Bank was three cents higher at $23.20, ANZ firmed six cents to $21.34, Commonwealth Bank eased 14 cents to $51.55, and Westpac gave away 10 cents at $20.65.
Among other stocks, more than a third of clothing retailer Billabong’s share value was wiped out as investors baulked at a $225 million capital raising and a big earnings downgrade.
Billabong plunged 49.61 cents, or 34.07 per cent, to 96 cents.
Fund manager Perpetual rose 69 cents to $24.03 as it forecast a full year profit drop of up to 65 per cent because of a major restructure that will lead to 580 fewer employees and pay cuts for its board.
Breads and spreads supplier Goodman Fielder improved 0.5 cents to 56.5 cents after it said 115 jobs would be cut from its Australian baking business as a result of the closure of three bakeries.
Fairfax was one cent weaker at 57 cents, a record closing low, after the editors of The Sydney Morning Herald and The Age resigned as the media company embarked upon the most radical restructure in its 170-year history.
Paint maker DuluxGroup stepped forward two cents to $2.98 as it said the reasons for takeover target Alesco’s rejection of its bid were misconceived and deficient, and that the offer remained “compelling”. Alesco was one cent poorer at $1.98.
Preliminary market turnover was 1.69 billion shares worth $3.59 billion, with 330 stocks trading higher, 721 lower and 402 unchanged.
