Stocks book worst day in 6 weeks

Wesfarmers has suffered its worst session since 2009, as investors also shunned tourism stocks.

Investors were also shunning the tourism sector following Tuesday’s Dreamworld tragedy. Picture: AAP.

The Australian sharemarket has endured its worst day in six weeks as timid growth in Wesfarmers’ retail operations dampened broader market sentiment.

Investors were also shunning the tourism sector following Tuesday’s Dreamworld tragedy, while weakening crude prices through the Asian session exacerbated a weak offshore lead.

At the close, the benchmark S&P/ASX 200 index had slumped 83 points, or 1.52 per cent, to 5,359.8, while the broader All Ordinaries index skidded 81.2 points, or 1.47 per cent, to 5,442.1.

The retail sector lagged after a disappointing trading update from Wesfarmers, with Coles’ sales showing the weakest expansion in seven years and growth at Bunnings slowing.

Wesfarmers slumped 5.7 per cent to $41.45, its worst one-day loss since 2009, while rival Woolworths edged down 0.5 per cent to $25.12.

“This performance will clearly disappoint the market,” Macquarie analysts said in a note following the Wesfarmers results.

“(It) will call into question how aggressively Coles will defend its market share. While we do not anticipate Coles to have lost share at this stage, any further deterioration over the all-important Christmas trading period could see the share dynamics change.”

Traders also abandoned Ardent Leisure after four people died in a horrific accident at its Dreamworld theme park on the Gold Coast on Tuesday.

Following a knee-jerk 22 per cent plunge at the open, the group managed to partially pare losses to end down 15 per cent. It extended on yesterday’s 7.8 per cent retreat, to bring the two-day fall to almost 25 per cent.

Peer Village Roadshow slipped 4.4 per cent, while Flight Centre yielded 2 per cent.

The materials sector was patchy, with iron ore-exposed stocks outperforming.

Fortescue reached a new two-and-a-half-year peak as it climbed 0.9 per cent to $5.49, while Rio Tinto advanced 1.7 per cent to $53.37.

BHP, in contrast, was weighed by lower oil prices as it slid 1.5 per cent to $22.84.

“It’s getting difficult to ignore the strong spot iron ore market which jumped sharply again,” CMC Markets chief market analyst Ric Spooner said.

“Fortescue broke decisively through recent resistance and was assisted by comments at the AGM, which confirmed guidance on cost control.

“While many expect iron ore prices to fall next year as supply increases, the current price strength based on better than expected demand naturally leads to doubts whether the bearish view is sustainable.”

In energy, Santos sank 3 per cent to $3.59, Origin Energy dropped 2.3 per cent to $5.46 and Woodside retreated 1.9 per cent to $28.37.

The big four banks followed the broader market as they fell out of the spotlight ahead of a series of trading updates over the coming two weeks.

Commonwealth Bank served as the laggard as it softened 1.4 per cent, while ANZ led its peers despite still falling 0.9 per cent.

Among other blue chips, Telstra lost 1 per cent to $5.00, while Qantas tumbled 3.5 per cent to $3.06.

Private hospital operator Healthscope weakened 1.3 per cent as investors continued to fret over its recent trading update, while peer Ramsay Health Care rose 1.5 per cent after reaffirming its forecasts.

Meanwhile, the Australian dollar jumped half a cent to US76.9c as headline inflation came in above expectations in the June quarter.