Energy saps stocks as calm returns

The energy sector has weighed on the local market in early trade, as US stocks steadied overnight.

Australian Securities Exchange boards. (Chris Pavlich)

The Australian sharemarket is being weighed down by the energy sector in early deals after a session of relative calm on Wall Street overnight.

At the 10.15am (AEST) official market open, the benchmark S&P/ASX 200 index weakened 9.5 points, or 0.18 per cent, to 5,218.2, while the broader All Ordinaries index gave back 10.4 points, or 0.20 per cent, to 5,316.2.

The moves have the market on track for its fifth fall in six sessions.

IG chief market strategist Chris Weston said investors would likely tread warily again today, although yesterday’s recovery shows bargain hunters are ready to step in on any substantial pullback.

“It promises to be a funny old session,” he said.

“We have been given little to key off from Wall Street, so it could be somewhat of a reflective session, although it’s worth pointing out the US volatility index remained firm despite and unchanged read in the S&P 500 cash market.

“This shows traders still expect elevated volatility over the coming 30 days.”

While iron ore skidded over 1 per cent, a strong rise in most base metals helped materials enjoy a positive start.

BHP Billiton rallied 0.7 per cent to $19.94, Rio Tinto tacked on 0.1 per cent to $46.86 and Fortescue bounced 0.8 per cent to $4.695.

It was a different story in energy as a 3 per cent slump in crude prices forced the big names into the red.

Santos slumped 4.3 per cent to $3.36, Origin slid 2.6 per cent to $4.84 and Woodside weakened 1.8 per cent to $26.89.

The big banks were mixed, with Westpac flat, CBA and NAB up 0.4 per cent and ANZ off 0.4 per cent.

In retail, Coles owner Wesfarmers eased 0.1 per cent, Woolworths inched down 0.1 per cent and Myer traded flat after its earnings met guidance but fell short of expectations.

Among other blue chips, Telstra lost 0.7 per cent to $5.035, while Qantas backtracked 1.4 per cent to $3.255.

Elsewhere, Seven West Media tumbled 3.5 per cent as its acquisition of The Sunday Times was waved through by the ACCC.

Meanwhile, the Australian dollar was steady around US74.7c, with investors eagerly awaiting local jobs data at 11.30am (AEST).