Australian shares have closed higher, lifted by the banks despite heavy losses to aged care stocks in reaction to the pending royal commission.
The benchmark S&P/ASX200 index was up 19.7 points, or 0.32 per cent, at 6,185.0 points on Monday, while the broader All Ordinaries index was up 17.6 points, or 0.28 per cent, higher at 6,293.9 points.
CommSec market analyst Tom Piotrowski said until the terms of reference for the inquiry are announced, the damage will be limited to shares of aged care providers.
“And whether or not it’s going to be extended more broadly to organisations that provide services to that retired cohort,” he said.
Shares in listed aged care provider Regis Healthcare were down 17.1 per cent to $3.00, Japara Healthcare down 17 per cent to $1.39, and Aveo Group down 7.2 per cent to $2.06.
While Estia Health Ltd was the hardest hit, plummeting 18.6 per cent to $2.40.
Estia was among the companies supporting Prime Minister Scott Morrison’s announcement of a commission into the sector and was looking forward to engaging in the consultation on the terms of reference for the inquiry.
Audits at some aged care facilities have revealed a dramatic increase in non-compliance and abuses in the aged care sector.
The heavyweight financial sector closed 0.6 per cent higher after early losses, with NAB posting the biggest gain, jumping 0.77 per cent to $27.56 after it announced former NSW Premier Mike Baird would be leading its retail unit following the departure of consumer boss Andrew Hagger.
Commonwealth Bank shares were up 0.35 per cent at $71.75 and ANZ was up 0.89 per cent to $28.40.
News over the weekend US President Donald Trump instructed aides to proceed with tariffs on about $US200 billion of Chinese products pulled back oil prices.
This led to materials being the only sector to join health care in the red, with BHP leading the losses, down 0.6 per cent to $31.61.
The Australian dollar was also impacted by the escalation of trade tensions between the US and China.
The Aussie was buying 71.60 US cents at 1630 AEST, from 72.06 US cents on Friday.
ON THE ASX:
* The S&P/ASX200 closed up 19.7 points, or 0.32 per cent, at 6,185.0 points
* The All Ordinaries was up 17.6 points, or 0.28 per cent, higher at 6,293.9 points
* In futures trading the SPI200 futures index was up nine points, or 0.15 per cent, at 6,183.0 points at 1630 AEST
CURRENCY SNAPSHOT AT 1630 AEST:
One Australian dollar buys:
* 71.60 US cents, from 72.06 US cents on Friday.
* 80.18 Japanese yen, from 80.64
* 61.55 euro cents, from 61.56
* 54.71 British pence, from 54.94
* 109.18 NZ cents, from 109.41
The spot price of gold in Sydney at 1630 AEST was $US1,196.18 per fine ounce, from $1,205.929 on Friday.