Stocks halt winning run

The local market has closed in the red, as investors sold off Commonwealth Bank.

The Australian sharemarket saw its four session winning run come to a halt on Wednesday, driven down by a sell-off in Commonwealth Bank stock and a lack of interest in the energy sector.

At the closing bell, the benchmark S&P/ASX 200 index gave back 8.8 points, or 0.16 per cent, to 5,543.7, while the broader All Ordinaries index retreated 10.6 points, or 0.19 per cent, to 5,626.1.

The record profit delivered by Commonwealth Bank ahead of the open drew the most attention, with an initial warm response from investors turning sour as analysts picked the full-year report apart.

Macquarie analysts retained an ‘underperform’ outlook on the company, while CLSA maintained its view CBA shares were “expensive” at current prices given a slowdown in earnings momentum.

“Growth of around 3 per cent in underlying profit is good news, although … cash profit missed forecasts by 1-2 per cent,” CMC Markets chief market strategist Michael McCarthy added.

“CBA’s margin compression of 2 basis points is a significant negative, given ANZ’s flat report yesterday. Analysts will ponder whether this is evidence of industry pressure or a competitive slip from CBA.”

Investors plumped for the latter argument, with CBA shares floundering compared to the broader financials sector.

At the end of trade, CBA was off 1.3 per cent, while Westpac fell a more restrained 0.6 per cent.

ANZ, which released robust quarterly numbers on Tuesday, outperformed with a 1.2 per cent jump, while NAB tacked on less than 0.1 per cent.

Earnings season has begun in nondescript fashion, with most big names delivering numbers broadly in line with lacklustre expectations.

Among those to beat forecasts on Wednesday was share registry company Computershare, which shot up 8.8 per cent after reporting a 2.4 per cent rise in profit. The move helped make the IT sector the best performing industry on the market, with a gain of 3.7 per cent.

The only other sector to enjoy a solid session was healthcare, which surged 1.4 per cent as Cochlear shares rebounded 7.6 per cent a day after a mixed profit update.

Meanwhile, struggling media group Fairfax tumbled 4.5 per cent after posting a heavy loss and warning of a soft start to fiscal 2017, Bell Financial plunged 15 per cent after reporting a flat first-half profit and utility AGL slumped 3.8 per cent after swinging to a loss in FY2016 and falling shy of market projections.

AGL’s result made the utilities sector one of the worst performers of the session, while energy similarly lagged after crude prices slid during the offshore session.

Santos slipped 1.7 per cent at $4.68 at the close and Woodside lost 0.51 per cent at $27.56.

In mining, BHP eased 0.73 per cent to $20.44, while Rio Tinto gave back 0.65 per cent to $50.57 and Fortescue backtracked 2.1 per cent to $4.58.

There was better news for OZ Minerals as it lifted 1.5 per cent after talking up its growth prospects, while the gold sector shone, driven by heavyweight Newcrest’s 4.2 per cent surge.

Among blue chips, Telstra stumbled 0.88 per cent to $5.60 ahead of its earnings report on Thursday and Qantas dipped 0.32 per cent to $3.16.

Meanwhile, the Australian dollar held steady through the session, ending at US76.9c. It briefly fell to US76.8c mid-afternoon as investors analysed the latest commentary on the economy from RBA Governor Glenn Stevens.