Stocks close in the red as banks weigh on sentiment

The local sharemarket has faded into the close, as the big banks weighed on sentiment.

The Australian sharemarket has faded into the close as the big banks fell out of favour.

At the end of the session, the benchmark S&P/ASX 200 index inched down 7.3 points, or 0.13 per cent, to 5,547.3, while the broader All Ordinaries index gave back 6.1 points, or 0.11 per cent, to 5,639.9.

CMC Markets chief market strategist Michael McCarthy said markets struggled for direction as earnings season slowed ahead of the release of a profit update from BHP after the close.

“The Australian sharemarket is on hold as company results jostle each other for attention, and investors await the yearly report from the world’s largest listed mining company – BHP,” he said.

Mr McCarthy noted “subdued” markets across the region after a strong surge in commodity prices overnight, driven by a 3 per cent jump in crude.

“Currency markets are becalmed, and gold and oil are steady at higher levels,” he said.

“Naturally, energy and material stocks [found] support, but volumes indicate an overall lack of investor interest.”

Ahead of its results, BHP shares edged up 0.45 per cent to $20.25, while rival behemoth Rio Tinto added 0.88 per cent to $48.46 and iron ore miner Fortescue rebounded 1.8 per cent to $4.52.

A strong rally in oil prices helped drive Santos shares up 2.5 per cent to $4.90, while Woodside advanced 0.95 per cent to $27.65.

The banking sector weighed on the broader market as analysts dissected a modest flow of results from the big four.

NAB drew the brightest spotlight through the session after the release of its Q3 numbers on Monday, with warnings of dividend pressure pushing it down 0.6 per cent.

ANZ weakened 0.1 per cent after announcing a $1 billion hybrid raising, while CBA lost 0.4 per cent and Westpac inched down 0.2 per cent.

Earnings season took a brief breather as few big names were on tap.

It allowed time for investors to digest the results of one of the best performers on the local bourse over the past couple of years in Domino’s Pizza, which slumped 3.7 per cent despite outperforming guidance with a record profit.

Elsewhere, property group Mantra skidded 4.8 per cent despite booking a 69 per cent lift in earnings, G8 Education plunged 12 per cent as it declared a weaker-than-expected profit and financial services group Challenger lifted 1.5 per cent as it outlined a 9.6 per cent rise in profit.

Among blue chips, Telstra slid 1 per cent at $5.435, while Qantas ended flat at $3.34.

Meanwhile, the Australian dollar edged up to US77.05c by the end of the local session as the minutes of the RBA’s latest board meeting offered no hints on future rates direction.