Australia’s share market is on track for its worst week since April, after what has been a tough five sessions for heavily weighted banks and miners.
The S&P/ASX200 fell 65.5 points by midday, down 0.71 per cent, to 9,123, as the broader All Ordinaries lost 63 points, or 0.67 per cent, to 9,318.1.
The local bourse shrugged off an overnight Wall Street session that saw the benchmark index close at a record high, which came as US interest rate-hike fears continued to ease and as the White House continued to shift its Iran strategy.
“Oil prices eased as markets appear to be taking comfort from President Trump’s strategic pivot away from a military campaign towards putting maximum economic pressure on Iran, which is likely to be a slower process implying less volatility,” Westpac economist Mantas Vanagas said.
Brent crude slipped below $US87 to its lowest price since Monday, but it wasn’t enough to boost Australia’s materials sector, which tumbled more than three per cent as gold and copper prices came off recent highs.
Shares in BHP, Australia’s largest company, tumbled 3.8 per cent to $61.05 ahead of its full-year results due next Tuesday.
Gold stocks were also heavy, as the precious metal fell for a second day to $US4,319 ($A6,121) an ounce, the pullback nabbing roughly a third of its recent 10 per cent rally.
The financials sector edged towards its second gain for the week, but was headed for a nearly three per cent slump since Monday, after Westpac, ANZ and CommBank financial reports all flagged double-digit drops in home-loan applications.
Despite broadly weak risk sentiment, Australia’s IT sector outperformed the other segments with a 2.3 per cent push, buoyed by broad-based buying as traders bet the bottom was in after a more than 50 per cent wipe-out between last October and March.
Strength in utilities continued, as AGL and Origin extended their post-earnings rebounds from recent lows.
Consumer-facing stocks also bounced from recent selling pressure, as NAB figures showed household spending rose 1.1 per cent in July, with gains in both essential and discretionary spending.
Earnings season continued to inject volatility into the market, as Baby Bunting soared more than 15 per cent after record high margins lifted its full-year pro-forma, post-tax net profit by a third to $16.1 million.
Investors were less impressed by insurance giant QBE, which slipped 1.7 per cent to $23.07 after a roughly flat profit result despite a 10 per cent revenue surge to $11.9 billion.
Alcoa has signed a 10-year gas deal with Equus Energy, which will supply up to 50 terajoules a day over the life of the contract.
The Australian dollar is buying 70.58 US cents, up from 70.49 US cents on Thursday at 5pm.
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