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May a bad month for the share market

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The share market has endured its worst month since January 2016, due to significant falls by the major banks and weaker iron ore prices.

The benchmark S&P/ASX200 index rose 0.1 per cent on Wednesday, as gains by banks and property developers were almost outweighed by falls by miners and energy companies.

But the benchmark index fell 3.4 per cent in May, its largest monthly fall in 16 months, due mainly to the poor performance of banks and miners, which make up two of the market’s biggest sectors, CMC Markets chief market analyst Ric Spooner said.

“Lower iron ore prices have weighed on the miners, while selling in the banks was sparked by concerns about the new bank tax, the possible property downturn and the fact their earnings were not as strong as expected,” he said.

“The banks also went ex-dividend during the month.”

Weaker iron ore futures offset positive Chinese manufacturing data on Wednesday, dragging the miners lower, Mr Spooner said.

The Australian dollar was boosted by continued growth in China’s manufacturing sector, hitting a four-day high of 74.77 US cents.

Rio Tinto fell 0.7 per cent, BHP Billiton shed 0.4 per cent, while Fortescue Metals rose 1.25 per cent.

Coal miner New Hope plunged 11 per cent to $1.62 after the Queensland Land Court recommended its New Acland mine expansion be rejected.

The energy sector also fell, with Origin Energy shedding 2.9 per cent, Santos down 1.8 per cent, Oil Search down 0.6 per cent and Woodside Petroleum was 0.3 per cent weaker.

“We are generally getting support for a lot of the defensive sectors like consumer staples,” Mr Spooner said.

Woolworths gained 0.7 per cent and Coles owner Wesfarmers added 1.1 per cent.

All four major banks rise, with NAB the strongest, adding 1.3 per cent.

Poker machine distributor Aristocrat Leisure was one of the market’s best performers, rising 3.8 per cent to an all-time high of $21.80.

ON THE ASX:

* The benchmark S&P/ASX200 gained 6.7 points, or 0.12 per cent, to 5,724.6 points.

* The broader All Ordinaries index added 5.3 points, or 0.09 per cent, to 5,761.3 points.

* The June SPI200 futures contract was up 12 points, or 0.21 per cent, at 5,734 points.

* National turnover was 2.3 billion securities traded worth $9.4 billion.

CURRENCY SNAPSHOT AT 1700 AEST

One Australian dollar buys:

* 74.50 US cents, from 74.38 US cents on Tuesday

* 82.69 Japanese yen, from 82.43 yen

* 66.59 euro cents, from 66.83 euro cents

* 58.15 British pence, from 57.98 pence

* 104.96 New Zealand cents, from 105.36 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,261.82 per fine ounce, down $US6.36 from $US1,268.18 on Tuesday.

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 1.635pct, from 1.647pct on Tuesday

* CGS 4.75pct April 2027, 2.387pct, from 2.391pct

Sydney Futures Exchange prices:

* June 2017 10-year bond futures contract at 97.585 (implying a yield of 2.415pct) from 97.575 (2.425pct)

* June 2017 3-year bond futures contract at 98.33 (1.67pct) from 98.31 (1.69pct)

(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)