Stocks eke out minor gains despite big mining falls

The ASX has crawled to another flat finish as consumer staples strength helped offset an almost 5pc fall in BHP’s share price.

A man is reflected against an electronic board displaying stock information inside the Australian Securities Exchange in Sydney. (Photographer: David Moir/Bloomberg)

The Australian share market inched higher as well received financial results from Wesfarmers and a2 Milk were countered by steep falls by heavyweight miners. The benchmark S&P/ASX200 index rose 0.05 per cent to 5,904 points. Bell Direct equities strategist Julia Lee said the market was under pressure solely due to significant falls by BHP Billiton and Fortescue. BHP on Tuesday reported a 25 per cent rise in half year underlying profit of $US4.05 billion, but that was below market expectations.

After its shares fell overnight in London and New York, its Australian-listed shares dropped $1.49, or 4.8 per cent, to $29.81.

Fortescue Metals shed 25 cents, or 4.7 per cent, to $5.11 after the iron ore miner’s half-year profit fell 44 per cent and it slashed its interim dividend. “That shaved about 15 points off the index so it was always going to be a tough day, but strip out those miners and an ex-dividend AMP and the market is looking pretty good,” Ms Lee said.

Rio Tinto also lost ground, dropping 1.6 per cent, and South32 was 2.5 per cent weaker.

Among the best performers was The A2 Milk Company, which soared 30 per cent to a record $11.30 after it more than doubled first-half profit and announced a partnership with dairy giant Fonterra.

Fellow infant formula maker Bellamy’s Australia gained 10.3 per cent. Wesfarmers shares gained three per cent despite the significant impact of a writedown on its UK Bunnings business on half year profit, as there were signs of improved sales growth at its Coles supermarkets.

Seven Group climbed 11.6 per cent after its half year underlying profit jumped 81 per cent.

Property developer Lendlease reported eight per cent half year profit growth and announced a share buyback of up to $500m, and its shares rose 6.2 per cent.

The energy sector was buoyed by stronger oil prices, though Santos dropped 3.1 per cent after narrowing its full-year loss and again declaring no dividend for shareholders.

The Australian dollar has shed more than half a US cent from Tuesday, after the release of December quarter wages figures that showed growth remains relatively weak, while construction work done dropped significantly in the final month of 2017.

AAP