The Australian sharemarket has started the new financial year on a negative note due to investor concerns about the world’s second largest economy.
Manufacturing data released in China on Monday showed activity barely growing, down to 50.1 points from 50.8 in May.
CommSec analyst Juliette Saly the Chinese data had upset investors following a negative lead from offshore markets on Friday.
“China’s official PMI has rattled investor sentiment and unfortunately our market is doing worse than other markets in the region,” she said.
“We had a pretty good end to the financial year over the course of last week but some weakness came through on concerns about when the central banks will wind back stimulus on Friday night.”
Indications of slowing economic growth in China is worrying investors because Australian resources companies are dependent on demand.
HSBC bank’s China Purchasing Managers’ Index (PMI), also out on Monday, dropped to 48.2 points in June, suggesting business conditions for medium and small enterprises have contracted for two consecutive months.
The resources sector was mostly lower, with BHP down 43 cents at $30.94 and Rio Tinto had lost 64 cents to $51.73.
Shares in drilling services company Boart Longyear also fell heavily after it said earnings may be further downgraded due to a slowdown in the mining sector.
Its shares were down five cents, or 7.4 per cent, at 62.5 cents.
The banks were all more than two per cent weaker, with National Australia Bank falling 71 cents to $28.97, ANZ lost 76 cents to $27.82, Commonwealth Bank fell $1.65 to $67.53 and Westpac had fallen 91 cents to $27.97.
The supermarket chain owners were also lower, with Woolworths down 61 cents at $32.20 and Coles-owner Wesfarmers $1.01 cents worse at $38.59.
KEY FACTS
* At the close on Monday, the benchmark S&P/ASX200 index was down 92.3 points, or 1.92 per cent, at 4,710.3.
* The broader All Ordinaries index was down 85.7 points, or 1.79 per cent, at 4,689.7.
* The September share price index futures contract was 87 points lower at 4,682, with 33,837 contracts traded.
* National turnover was 1.1 billion securities worth $3.6 billion.
