Australian share market ends winning streak as ‘risk off’ sentiment creeps back
The Australian share market ended its recent strong rally as ‘risk off’ sentiment crept back, with the benchmark index retreating below its key resistance level.
The benchmark index on the Australian share market fell below the key resistance level of 6200 after breaching it for the first time in seven months earlier this week, ending the recent strong rally.
The S&P/ASX200 closed 0.6 per cent lower at 6177 while the All Ordinaries Index slid 0.5 per cent to 6385.
The S&P/ASX200 rose to a fresh seven-month high on Friday on the back of the Reserve Bank hinting an interest rate cut could be coming and cautious investors had been “testing” the level, CommSec analyst Steve Daghlian said.
But markets had turned “risk-off” as the weekend approached, ThinkMarkets Australia analyst Carl Capolingua said.
“We’ve had a great run over the last two weeks and we’ve been comparatively well supported demand-wise,” he said.
“We were holding firm until after the lunch break, but it was one-way traffic from about 2pm.
“The move was coordinated across US futures, and in Asia, so I don’t think it was anything specific to us.”
Stocks including biotech giant CSL and the big miners weighed on the market.
CSL was down 0.66 per cent at $299 while Rio Tinto dropped 0.85 per cent to $95.45 and BHP slid 1.41 per cent to $36.25.
Rio Tinto released a quarterly update saying iron ore shipments had declined 5 per cent.
It also said future potential operational and mine development impacts from the new version of WA’s 48-year-old Aboriginal Heritage Act, which the state government hopes to pass later this year, combined with changes to the company’s own “heritage approach” in the wake of the Juukan Gorge debacle remained unknown.
But it has still stuck to its full year production guidance.
Coal miner New Hope Corporation retreated 3.27 per cent to $1.18 after announcing up to 75 per cent of its corporate office workforce will be made redundant by the end of November.
“The changes will see a more streamlined management structure with the majority of executive positions being removed,” the company said, adding “we are in for a tough couple of years”, citing delays in receiving approvals for its Acland Stage 3 project in Queensland, which has already resulted in almost 200 job losses.
ANZ was down 0.26 per cent to $19.31, Commonwealth Bank inched 0.06 per cent lower to $69.24, National Australia Bank eased 0.05 per cent to $19.22 and Westpac shed 0.64 per cent to $18.66.
The Aussie dollar was fetching 70.76 US cents, 54.87 British pence and 60.42 Euro cents in afternoon trade.