Oil rise fails to lift stocks

The sharemarket slipped further into the red at noon, as declines in supermarkets and banks offset strength in energy stocks.

Oil rise fails to lift stocks

The Australian sharemarket retreated further into the red at noon, as declines in the big supermarkets and banks offset strength in energy stocks.

At 12.05pm (AEST), the benchmark S & P/ASX200 index was down 17.9 points, or 0.36 per cent, at 4919.7, while the broader All Ordinaries index was off 16.2 points, or 0.32 per cent, at 5001.8.

Energy stocks were buoyed from the open following dramatic spikes in global oil prices across the weekend. Oil rose 8 per cent on the back of a fall in output in Russia and the shutdown of the Keystone pipeline in the US.

Woodside Petroleum gained 1.16 per cent to $25.23, Santos added 3.13 per cent to $3.95 and Oil Search rose 2.33 per cent to $6.60. The sector was up 1.5 per cent.

The materials sector was also strong on the oil price lift, but gains in the sector were tempered by a 0.9 per cent fall in the iron ore price, which is off 1.3 per cent over the past week to $US53.30 a tonne.

BHP Billiton was up 0.93 per cent to $16.33, while Rio Tinto improved 1.11 per cent to $43.74 as the sector improved 0.6 per cent.

The sector also was able to shrug off today’s Chinese inflation data update - the nation’s consumer price index coming in unchanged at 2.3 per cent and slightly below analyst expectations of a small uptick.

On the negative side of the ledger banks continue to remain under pressure, with the financial sector on track to repeat Friday’s 0.9 per cent falls, which came amid federal Opposition Leader Bill Shorten’s vow to hold a royal commission into the industry.

National Australia Bank was the worst of the big four at noon, slipping 0.8 per cent to $24.93, while ANZ eased 0.31 per cent to $22.21. Commonwealth Bank was off 0.25 per cent to $70.58, while Westpac lost 0.75 per cent to $28.305. The sector fell 0.5 per cent.

Supermarket majors Wesfarmers and Woolworths also slipped on Friday, 0.32 per cent and 0.89 per cent respectively, and struggled again in early trade today. The duo were down 1.24 per cent and 1.89 per cent respectively, with the consumer staples sector off 1.7 per cent.

The surge in oil prices helped support the Australian dollar, with the currency holding above the key support level of US75.2 cents and exhibiting a bullish bias.

Elsewhere, healthcare stocks were down 1 per cent as CSL fell 1.14 per cent to $100.10 and Sonic Healthcare slipped 0.98 per cent to $18.23.

Consumer discretionary stocks lost 1 per cent with JB Hi-Fi slipping 1.19 per cent to $22.33 and Nine Entertainment off 2.71 per cent to $1.075.

In Australia, the market on Friday regained some heavy early losses but still closed lower as weakness among the big banks weighed upon the bourse.