Stocks slip more than 0.5pc

The local market has been weighed by weaker oil prices and disappointment with Telstra’s results.

The Australian sharemarket has ended lower for a second day as weaker oil prices hit global market sentiment and Telstra failed to impress investors with its full-year profit report.

At the closing bell, the benchmark S&P/ASX 200 index backtracked 35.7 points, or 0.64 per cent, to 5,508, while the broader All Ordinaries index weakened 28.8 points, or 0.51 per cent, to 5,599.4.

Earnings season dominated the headlines once again — as it will through the rest of the month — with the focus centred on Telstra.

The telco giant has been in the spotlight this year for all the wrong reasons amid a shake-up in its executive ranks after a series of damaging network outages.

Its profit was robust regardless, with earnings up sharply and an expected share buyback of $1.5 billion announced, while it also detailed a move to address its brand perception through a hefty investment in its network.

Macquarie analysts said revenue trends lagged, helping push shares down 1.6 per cent to $5.51 despite earnings coming broadly in line with expectations.

“This needs some digesting,” the investment bank said.

“No big shocks here operationally at first glance. But the $3bn capital program is a big surprise and we await further detail. Capital management of $1.5bn is broadly consistent with market expectations.”

Profit numbers were also on tap from furniture retailer Nick Scali, which leapt 15 per cent after topping guidance, and hedge fund Magellan, which soared 7 per cent after detailing a bumper full-year profit.

Industrial property company Goodman Group tacked on 0.7 per cent after matching market expectations.

JB Hi-Fi was also in the news as its potential bid for rival retailer The Good Guys was given the green light by the ACCC.

The development pushed its shares up 2.1 per cent.

In finance, Commonwealth Bank shares again faced significant pressure as investors failed to see the bright side of the record cash profit it delivered to the market yesterday.

At the close CBA shares slumped 1.9 per cent, outpacing losses of 1 per cent from ANZ and NAB.

Westpac floundered the most however, losing 2.6 per cent after it updated investors on a souring of its loan book in mining regions.

Elsewhere, financial services group AMP tumbled 3.8 per cent on concerns about the profitability of its life insurance arm.

The energy sector was in the spotlight after crude slid 3 per cent in offshore deals, with Santos ceding 2.8 per cent to $4.55 and Woodside backtracking 1.2 per cent to $27.25.

“Oil is pulling back towards the US$40 a barrel level again and many in the markets are concerned that the shorts may even be looking for prices to drop down towards the $US35 level,” IG market analyst Angus Nicholson said.

In mining, BHP lost 0.9 per cent to $20.25, while Rio Tinto slumped 1.7 per cent to $49.71 as it went ex-dividend and Fortescue dipped 1.3 per cent to $4.52 after iron ore prices fell during offshore trade.

Meanwhile, the Australian dollar flirted with the US77c mark after touching US77.5c overnight, ending the local session at US77.09c.