Stocks close in the red for third straight session

The benchmark has settled at its lowest mark since mid-September, after a third straight loss.

The information boards at the Australian Stock Exchange (ASX) show the market down more than 1% in Sydney, Wednesday, May 4, 2016. (AAP Image/Dean Lewins) NO ARCHIVING

The Australian sharemarket has ended the week with a third straight red session, as a stunning writedown at AMP and impairments at ANZ dampened sentiment and overshadowed a better-than-expected result from Macquarie Group.

At the close, the benchmark S&P/ASX 200 index slipped 11.7 points, or 0.22 per cent, to 5,283.8, while the broader All Ordinaries index weakened 7.5 points, or 0.14 per cent, to 5,370.9.

The benchmark index ended down 2.7 per cent for the week and settled at its lowest mark since mid-September.

CMC Markets chief market strategist Michael McCarthy said a resurgent resources sector prevented the market from suffering a more brutal end-of-week sell-off.

“Overnight support for metals and oil markets saw the materials sector leading the market, closely followed by energy,” he said.

“However, most sectors (were) in the red as ‘top down’ selling of index futures batters share prices. Traders speculate that the pressure is coming from international institutional investors ahead of the RBA meeting next week and the US election that follows.”

Rising bond yields were putting further heat on high-yield stocks that had been recent favourites of traders given the low interest rate environment.

“High growth stocks remain under pressure, as investors trim positions in former market darlings,” Mr McCarthy said.

“Volumes were elevated in both cash and futures markets ahead of important market risk events.”

The worst performer in the ASX 200 was financial services giant AMP, which announced writedowns of $668 million alongside a separate FY2016 profit hit of $500m.

“Investors are fleeing after the CEO announced an … impairment alongside weak insurance numbers,” Mr McCarthy said.

“In contrast Macquarie Group shares are up solidly after the investment bank told the market earnings remain consistent with the previous year, and announced a dividend higher than forecast.”

AMP plunged 9.1 per cent at the close, while investment bank Macquarie bounded 1.7 per cent as a 2 per cent fall in first half profit topped expectations.

It was a mixed bag among the big four banks, with ANZ skidding 1.7 per cent as it booked $360 million in charges, while Commonwealth Bank yielded 0.3 per cent and Westpac lost 0.5 per cent.

The outperformer was NAB, which jumped 1.2 per cent as investors continued to celebrate Thursday’s robust full year earnings result.

In retail, Woolworths swung into the red as investors doubted the strength of momentum in its sales. The group had risen 3 per cent in morning trade but ended down 2.3 per cent despite closing the gap on main rival Coles in the first quarter.

Wesfarmers, which owns Coles, ended flat after two days of heavy falls.

In materials, Fortescue surged 3.2 per cent to $5.51, BHP bounced 2.1 per cent to $22.98 and Rio Tinto advanced 0.8 per cent to $53.75.

In energy, Santos rallied 1.1 per cent to $3.56, Origin Energy climbed 1.5 per cent to $5.38 and Woodside added 1.4 per cent to $28.32.

Crisis-hit Ardent Leisure wavered on the proposed reopening of the Dreamworld theme park, with the uncertainty pushing its shares down 5 per cent. It lost 22 per cent of its value on the week.

Among blue chips, Telstra eased 0.6 per cent to $4.95, while Qantas skidded 3.6 per cent to $2.94.

Meanwhile, the Australian dollar edged up US0.1c through the local session, rounding off a roller-coaster week at US75.9c.