The Australian sharemarket has closed sharply lower after China’s currency devaluation helped pull back resources stocks, and the Commonwealth Bank’s capital raising weighed on the other big banks.
OptionsXpress market analyst Ben Le Brun said China’s second devaluation of its currency in two days – which raised questions about the strength of the Chinese economy – and weaker commodity prices had hurt the mining and energy sectors.
Also, the Commonwealth Bank’s $5 billion capital raising had prompted investors to trim their holdings in the other big banks so that they could buy more stock in the Commonwealth Bank and not have their stake diluted.
Mr Le Brun said IT sector bellwether Computershare’s financial results also missed expectations, generating more negative sentiment.
“So, just a day to forget,” he said.
In the resources sector, global miner BHP Billiton was down $1.14 at $25.20, Rio Tinto lost $2.95 to $51.65, and Fortescue Metals dumped 15.5 cents at $1.79.
Among the major banks, Commonwealth Bank was in a trading halt after it announced a $5 billion capital raising and a five per cent rise in cash profit to $9.14 billion.
Westpac fell 46 cents to $31.59, National Australia Bank reversed 64 cents to $31.82, and the ANZ dropped 57 cents to $29.50.
Blood products and vaccines supplier CSL descended $2.11 to $93.00 after it lifted full year net profit by 5.5 per cent but disappointed investors with its outlook.
Computershare retreated $1.09, or 9.32 per cent, to $10.61 as the shareholder services firm warned a fall in earnings would be repeated in the current financial year.
Primary Health Care lifted 19 cents to $4.64 as it outlined plans to expand its network of medical centres and move into the Asian pathology market.
KEY FACTS
* At 1617 AEST, the benchmark S&P/ASX200 index was down 91.1 points, or 1.66 per cent, to 5,382.1 points.
* The broader All Ordinaries index was down 89.6 points, or 1.64 per cent, to 5,383.5 points.
* The September share price index futures contract was 104 points lower at 5,302 points, with 40,520 contracts traded.
* National turnover was 1.76 billion securities worth $5.3 billion.