The Australian share market has closed steady, as regulatory risk weighed on the country’s major banks and surging iron ore futures rallied the miners.
The benchmark S&P/ASX200 stock index closed down just 4.2 points, or 0.07 per cent, to 5,985.6 points, with gains for mining stocks and Telstra offset by losses for Australia’s five largest banks.
CMC Markets chief market strategist Michael McCarthy said the Australian market is under pressure from a financial sector still smarting from last week’s announcement of a Royal Commission into its practices.
“International banks are facing increasing competition, and at a time when the rest of the world are freeing up their banks, it’s clear ours are being dragged lower by regulatory risks, specifically for the Big Four and Macquarie,” Mr McCarthy said.
Westpac led the losses, down 1.2 per cent to $31.17, ANZ lost one per cent to $28.33, National Australia Bank lost 0.5 per cent to $29.47 and Commonwealth Bank came in 0.3 per cent lower at $78.92.
The investment bank Macquarie was also under pressure, dropping 0.8 per cent, to $97.45.
Iron ore futures have rallied for four straight days, helping lift BHP Billiton and Fortescue Metals 1.6 and 1.5 per cent, respectively.
Shares Rio Tinto were also up 1.2 per cent at $72.05 after the company announced former Anglo-American Plc executive Simon Thompson will take over from Jan du Plessis as chairman.
The telco sector was up 2.1 per cent as Telstra shares, having tested a low of around $3.35 last week, bounced back on an analyst upgrade to finish eight cents, or 2.3 per cent, higher at $3.50 – adding almost a billion dollars to the company’s market cap.
Energy stocks closed mixed as global oil prices continued to find incremental gains.
In company news, shares in Metcash jumped 25 cents, or 9.1 per cent to $3.00 – their highest level in more than three and a half years, after the grocery wholesaler landed a 24 per cent lift in half-year profit.
A cut in earnings forecast sent G8 Education shares down $1.02 cents, or 23 per cent, to $3.40.
Crown Resorts shed 22 cents, or 1.8 per cent, at $12.11 after the casinos operator was hit with a class action alleging its shareholders were not told enough about the risks it took while operating in China.
Despite the greenback bouncing to a two week high, the Australian dollar has found some support around the 76 U.S. cent mark, as iron ore, cooper and gold continued to support a surge in commodities prices.
The local currency was trading at 75.97 US cents at 1700 AEDT on Monday, from 75.64 US cents on Friday.
ON THE ASX:
* The benchmark S&P/ASX200 stock index closed down 4.2 points, or 0.07 per cent, at 5,985.6 points
* The broader All Ordinaries index was down 4.9 points, or 0.08 per cent, at 6,070.6 points
* The SPI200 futures contract was down one point or 0.02 per cent at 5,996 points
* National turnover was five billion securities traded worth $5.6 billion
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 75.97 US cents, from 75.64 on Friday
* 85.695 Japanese yen, from 85.14 yen
* 64.01 euro cents, from 63.42 euro cents
* 56.43 British pence, from 55.91 pence
* 110.94 NZ cents, from 110.80 cents
The spot price of gold in Sydney at 1700 AEDT was $US1,274.43 per fine ounce, from $US1,275.07 per fine ounce on Friday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 1.8552pct, from 1.8407pct
* CGS 4.75pct April 2027, 2.5042pct, from 2.4911pct
Sydney Futures Exchange prices:
* December 2017 10-year bond futures contract at 97.44 (implying a yield of 2.56pct), from 97.45 (implying a yield of 2.55pct) on Friday
* December 2017 3-year bond futures contract at 98.035 (1.965pct), from 98.05 (1.95pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)