Steep losses from the heavyweight mining, banks and telco sectors have led the Australian share market lower.
At Friday’s close, the benchmark S&P/ASX200 fell 0.65 per cent to 5,751.7 points with most sectors in the red.
Driving energy and mining stocks lower was a near-five per cent fall in global oil prices overnight after investors were disappointed that oil production cuts decided by the Organisation of the Petroleum Exporting Countries on Thursday were not deeper.
Market analyst Ben Le Brun, from optionsXpress, said the downbeat energy sector and ongoing bank levy concerns overshadowed a positive lead from Wall Street, where the S&P 500 and Nasdaq closed at record highs overnight.
“There’s a bad confluence of events working against our market, including ongoing selling in the banks, weak oil prices hurting the energy sector and softer iron ore prices and BHP weighing on the miners,” he said.
“The competitive forces are also working against the telcos which is a sector that has not been happy for a while – it’s like trying to catch a falling knife – with lots of profit downgrades and ongoing concerns about Telstra’s dividends over the next few years.”
The latest event to the hurt the telecommunication giants on Friday was the competition regulator’s ruling that non-NBN high-speed internet providers will set service prices in line with the NBN.
Mr Le Brun said the decision will likely intensify competition in the sector.
Shares in Telstra, TPG and Vocus Group were all lower, with Vocus leading declines with a 3.3 per cent fall.
The big four banks were all weaker, with ANZ dropping the most with a 1.5 per cent decline.
Regional banks suffered heavier losses with Bendigo and Adelaide Bank down nearly three per cent and Bank of Queensland 1.49 per cent weaker.
Leading losses for the miners was Fortescue Metals’ 4.5 per cent decline to $4.85, followed by BHP Billiton’s two per cent fall to $24.01, while Rio Tinto was down 1.8 per cent at $63.64.
Among the energy stocks, Woodside, Oil Search, Santos and Origin Energy were down by between one to 2.7 per cent.
Elsewhere on the market, Fairfax Media shares rose 1.2 per cent to $1.26 after the media company and New Zealand rival NZME said they will ask the country’s High Court to overturn a decision that blocked their planned merger.
Meanwhile, the Australian dollar was trading lower against the greenback after falling from 74.50 US cents to 74.24 cents around midday.
At 1700, it was 74.38 US cents, down from 74.91 on Thursday
National Australia Bank currency strategist Rodrigo Catril said the local unit had slipped during the day as the US dollar recovered from overnight losses.
“There is a mild risk-off sentiment and commodity-linked currencies like the Aussie are suffering the most because of the weakness in oil prices, while the US dollar, which has some immunity, regained ground,” he said.
ON THE ASX:
* At the close, the benchmark S&P/ASX200 was down 37.9 points, or 0.65 per cent, at 5,751.7 points.
* The broader All Ordinaries index was down 36.7 points, or 0.63 per cent, at 5,792.1 points.
* The June SPI200 futures contract was down 40 points, or 0.69 per cent, at 5,755 points.
* National turnover was 1.9 billion securities traded worth $6.4 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.38 US cents, from 74.91 on Thursday
* 82.78 Japanese yen, from 83.70 yen
* 66.34 euro cents, from 66.71 cents
* 57.78 British pence, from 57.71 pence
* 105.63 New Zealand cents, from 106.45 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,261.20 per fine ounce, up $US3.44 from $US1,257.76 on Thursday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.6561pct, from 1.675pct
* CGS 4.75pct April 2027, 2.4114pct, from 2.438pct
Sydney Futures Exchange prices:
* June 2017 10-year bond futures contract at 97.56 (implying a yield of 1.44pct), from 97.53 (2.47pct) on Thursday
* June 2017 3-year bond futures contract at 98.30 (2.7pct), from 98.28 (1.72pct)
(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)
