Stocks weighed by healthcare, close in red

The local market closed in the red, as Healthscope slid near 6 per cent and energy stocks underperformed.

Healthscope shed a further 5.9 per cent as fallout from its profit warning continued. Picture: AAP.

The Australian sharemarket has begun the week in the red as losses in crude prices through the Asian session weighed on energy stocks and the healthcare sector continued to be hampered by a soft trading update by Healthscope on Friday.

At the close, the benchmark S&P/ASX 200 index retreated 21.8 points, or 0.4 per cent, to 5,408.5, while the broader All Ordinaries index dipped 24.8 points, or 0.45 per cent, to 5,489.1.

The healthcare space slid the most, retreating 1.9 per cent through the session, largely due to the negative influence of Healthscope and its peer Ramsay Health Care.

A surprise profit warning from the former wiped 19 per cent from its shares Friday, with a further 5.9 per cent stripped today, while Ramsay shed a further 4.5 per cent on top of a 6 per cent dive on Friday.

“Healthscope’s shock announcement of poor private health admissions last quarter poses a couple of questions for investors,” CMC Markets chief market analyst Ric Spooner said.

“The first is whether last quarter was a statistical aberration or indicative of a lower growth trend for private hospitals. The second is whether Healthscope’s performance will be fully reflected in the wider industry.

“Markets will now be attuned to any announcement from Ramsey Healthcare whose AGM is due on November 9.”

Energy was the other major underperformer, weakening 1.5 per cent as doubts over OPEC’s commitment to cut supply lingered.

Santos slumped 2.9 per cent to $3.73, while Origin Energy yielded 1.1 per cent to $5.55 and Woodside slid 1.1 per cent to $28.99.

Event risk for the broader market is seen “elevated” this week as inflation numbers are due Wednesday and the banks draw the spotlight, IG chief market strategist Chris Weston said.

“The focus turns to the Australian banking sector with NAB detailing half-year earnings on Thursday, followed by Macquarie on Friday,” he said.

“As always the investment community are keen to look out for any further contraction in margin, given the high competition and increased costs within the wholesale funding markets.

“The banking sector managed to gain 0.8 per cent last week, underperforming the material space (1.6 per cent), so we will see if there is any rotation this week.”

Monday failed to see any rotation, with the big four ending mixed as the big resources names gained.

Westpac and ANZ led the way among the banks with gains of 0.5 and 0.4 per cent, respectively, while CBA and NAB backtracked 0.3 and 0.4 per cent, respectively.

Meanwhile, the major miners bucked the market trend, with BHP edging up 0.2 per cent to $23.09 and Rio Tinto climbing 0.6 per cent to $51.23.

Among blue chips, Telstra tacked on 0.2 per cent to $5.05, while Qantas weakened 0.6 per cent to $3.23.

Elsewhere, Genworth Australia jumped 2.7 per cent after its US majority shareholder accepted a takeover offer from Chinese interests, Super Retail skidded 3 per cent on news of board tumult and Vitaco surged 4.8 per cent as regulators approved its sale.

Meanwhile, the Australian dollar edged up US0.1c to US76.1c through the local session, with investors cautious ahead of inflation data this week.