The Australian share market has lost ground on Monday after losses in the finance sector following Commonwealth Bank’s announcement it will spin off its wealth management business.
The benchmark S&P/ASX200 index closed down 14.8 points, or 0.24 per cent, at 6,210.4 points, while the broader All Ordinaries was down 13.4 points, or 0.21 per cent, at 6,308.7 points.
Despite the losses, the market still sits at one of its highest levels in around 10 years as the miners and energy stocks rose.
CBA dropped 2.3 per cent, or $1.70, to $72.16, for its biggest intraday fall in nearly seven weeks, after saying it would step up plans to offload its wealth management businesses as it looks to become a smaller, lending-focused bank.
Pre-empting structural reforms that may follow the banking royal commission, CBA said it would also explore whether to divest its general insurance business.
Australia’s big four lenders spent years building large networks of financial advisers to recommend their products, but inquiry into the sector could force the separation of the development of financial products from sales of them.
Commsec chief market analyst Steven Daghlian said the sector had been hit hard after strong gains last week.
‘The sector had its best week in a year-and-a-half last week but the major banks for the whole are the main weight today,’ he said.
The sentiment emanating from CBA hit the wider financials sector, which slid one per cent.
ANZ dropped 30 cents, or 1.1 per cent, to $28.35, NAB fell 31 cents, or 1.1 per cent, to $27.33, while Westpac slid 18 cents, or 0.6 per cent to $29.20.
Energy stocks rose after OPEC member nations agreed last Friday on a more modest increase in crude output than markets had been expecting, with the shortfall sparking a jump in oil prices.
‘Last week those sectors were quite volatile, but the OPEC announcement has had a positive effect,’ Mr Daghlian said.
Woodside Petroleum firmed 1.5 per cent to $34.90, while Origin Energy rose 1.8 per cent to $9.89.
Higher iron ore and copper prices helped the resource sector: global miner BHP jumped 1.4 per cent to $32.98, while rival Rio Tinto strengthened one per cent to $83.25.
The local currency was trading at 72.45 US cents at 1630 AEST on Monday, up from 74.04 US cents on Friday.
ON THE ASX
* The benchmark S&P/ASX200 was down 14.8 points, or 0.24 per cent, at 6,210.4 points
* The broader All Ordinaries index was down 13.4 points, or 0.21 per cent, at 6,308.7 points
* The SPI200 futures contract was down 12 points, or 0.19 per cent, at 6,155 points
* National turnover was 2.7 billion securities traded worth $5.3 billion
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.18 US cents, from 74.04 on Friday
* 81.196 Japanese yen, from 81.38 yen
* 63.78 euro cents, from 63.62 euro cents
* 56.03 British pence, from 55.72 pence
* 107.62 NZ cents, from 107.26 cents
The spot price of gold in Sydney at 1700 AEST was $US1,265.64 per fine ounce, from $US1,266.78 per fine ounce on Friday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent May 2021, 2.092pct, unchanged
* CGS 4.75pct May 2028, 2.6308pct, unchanged
Sydney Futures Exchange prices:
* September 2018 10-year bond futures contract at 97.36 (implying a yield of 2.64pct), from 97.33 (implying a yield of 2.67pct) on Friday
* September 2018 3-year bond futures contract at 97.885 (2.115pct), from 97.875 (2.125pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)