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The share market slipped towards its firstly weekly decline in four weeks amid softening iron ore prices and gloom over the outlook for banks.
The ASX 200 cut a 30-point opening loss to two points or less than 0.1 per cent by mid-session, leaving the index more than 70 points adrift for the week. Global trade worries, a downbeat outlook from ANZ Bank and falling expectations for further rate cuts undermined the local market during a week that began near one-month highs.
The financial sector was the biggest drag on the index for a second day following ANZ’s lacklustre full-year earnings report yesterday. News this morning that Macquarie Bank’s first-half net profit was 13 per cent weaker than last year did little to improve the mood. Macquarie shares fell 1.8 per cent after Managing Director and CEO Shemara Wikramanayake said the company expects its full-year result to be slightly lower than last year.
ANZ touched a two-month low before paring its loss to 1.8 per cent. Westpac, which reports on Monday, fell 0.9 per cent. NAB, due to report on Thursday, lost 0.7 per cent. The Commonwealth Bank gave up 0.9 per cent.
The big iron ore miners helped raise the index to Monday’s five-week peak, but have since faded as ore and copper prices retreated. BHP fell 0.9 per cent this morning, Rio Tinto 0.7 per cent and Fortescue 0.1 per cent. Lithium producer Pilbara Mining bucked the downtrend in resource stocks, rising 3.1 per cent. Beaten-up graphite miner Syrah also shone, climbing 5 per cent from seven-year lows.
Health giant CSL had a new all-time closing high within reach after advancing 0.9 per cent. The company’s shares have risen almost 50 per cent since it established a foothold in the vast Chinese market in May last year. Sonic Healthcare added 1.7 per cent.
Aged care operators mostly rallied following a scathing report into the industry from the recent Royal Commission. While shares initially fell after the interim report from the 10-month inquiry condemned the system as “sad and shocking”, most quickly turned positive. Estia Health rose 3.9 per cent to its highest level in five months. Japara Healthcare bounced 5.4 per cent. Regis Healthcare fell almost 5 per cent in early action before lately paring its loss to 0.6 per cent.
In economic news, growth in manufacturing activity slowed last month and new orders – a leading indicator for future activity – dropped sharply. The Ai Group’s Performance of Manufacturing Index declined to 51.6 points from 54.7 in September. Readings above 50 indicate expanding activity. New orders slumped 8.8 points to 48.3, well below the long-term average of 51.3.
What’s hot today and what’s not:
Hot today: cancer treatment specialist Oncosil Medical surged to a seven-month peak after its lead product cleared a UK regulatory hurdle. Shares advanced 33.3 per cent to 14 cents on news the British Standards Institute gave the company’s device for treating pancreatic cancer a positive CE Mark Status Report. The report is an important step towards bringing the product to the European market. The initial application for a CE Mark was knocked back in March, sending Oncosil’s share price down to a low of 2.1 cents.
Not today: Australian Mines lost a quarter of its market capitalisation this morning after a deal to sell the entire battery-grade cobalt sulphate and nickel sulphate production from its Sconi mine near Townsville company fell through. The deal collapsed after South Korean company SK Innovation failed to provide proof of funding for the offtake agreement. Australian Mines said it remained committed to developing the Sconi project. Shares were last trading 25.9 per cent lower at 2 cents.
Asian
markets retreated after a Bloomberg report raised doubts over the
likelihood of a lasting US-China trade deal. China’s Shanghai Composite fell
0.2 per cent, Hong Kong’s Hang Seng 0.1 per cent and Japan’s Nikkei 0.5 per
cent. S&P 500 index futures were recently ahead three points or 0.1 per
cent.
Turning to commodity markets, January Brent crude – the new front month contract, rose six cents or 0.1 per cent to $US59.68 a barrel. Gold was flat at $US1,514.90 an ounce.
On currency markets, the dollar edged up a tenth of a cent to 68.99 US cents.
