Australian shares have lost ground on the first day of the new financial year as weakness in Asian markets, courtesy of weaker-than-expected Chinese manufacturing data, flowed into local sentiment.
The benchmark S&P/ASX200 index closed 16.8 points, or 0.27 per cent, lower at 6,177.8 points, while the broader All Ordinaries index ended down 16.4 points, or 0.26 per cent, at 6,273.3 points.
The local market was dragged lower by energy, mining and financial stocks as the markets in China, Japan and Korea fell more than two per cent on Monday afternoon.
The energy sector was the biggest casualty, falling 0.81 per cent, with Woodside Petroleum, Origin Energy and Santos all ending in the red.
James Hardie suffered the heaviest fall with mining companies BHP Billiton, Newcrest Mining and BlueScope Steel also in retreat.
CMC Markets chief market strategist Michael McCarthy said the local market held up relatively well, supported by individual stocks such as biotechnology giant CSL and construction heavyweight Cimic, given the selloff across Asia.
Asian markets came under pressure the latest manufacturing data – a survey of purchasing managers’ activity – was softer than expected for May, while trade concerns continue to be a concern, Mr McCarthy said.
“It was slightly below expectations, about point one below, and although it didn’t change the overall picture, it didn’t help,” Mr McCarthy said of the survey.
“The problem this week for markets, China in particular, is that no news is now bad news: we’ve got a deadline on the 6th of July for the introduction of tariffs by the US.”
US President Donald Trump in mid-June gave the green light to a 25 per cent tariff on $US50 billion ($68 billion) of goods imported from China, with the levy to be implemented in two tranches.
Tariffs on $US34 billion worth of imports on 818 product categories take effect from July 6, with a second tranche worth $US16 billion to take effect at a later date.
China has retaliated with plans to impose an additional 25 per cent tariff on 659 US goods worth $US50 billion, with the first round to also take effect on July 6.
In local company news, Sigma Healthcare shares plunged 32.5 cents, or 40 per cent, to a seven-year low of 48.5 cents after the company lost its contract to supply the Chemist Warehouse discount chemist chain from mid-2019.
The Australian dollar lost some ground following the release of China’s PMI data just before lunchtime
At 1700 AEST, the Australian dollar was trading at 73.78 US cents, slightly down from 73.89 US cents on Friday.
ON THE ASX:
* The benchmark S&P/ASX200 closed down 16.8 points, or 0.27 per cent, at 6,177.8 points
* The broader All Ordinaries index was down 16.4 points, or 0.26 per cent, at 6,273.3 points
* The SPI200 futures contract was down 10 points, or 0.16 per cent, at 6,138 points at 1630 AEST
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 73.78 US cents, from 73.89 on Friday
* 81.674 Japanese yen, from 81.721 yen
* 63.31 euro cents, from 63.49 euro cents
* 55.97 British pence, from 56.37 pence
* 109.08 NZ cents, from 108.43 cents
The spot price of gold in Sydney at 1700 AEST was $US1,249.446 per fine ounce, from $US1,251.059 per fine ounce on Friday