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The Australian sharemarket has struck a two-month low after the banks again drew heavy selling in morning trade. At the 10.15am (AEST) official market open, the benchmark S&P/ASX 200 index lost 43.6 points, or 0.81 per cent, to 5,342.2, while the broader All Ordinaries index yielded 41.3 points, or 0.75 per cent, to 5,443.3. The action leaves the market at risk of its fourth straight weekly decline. IG chief market strategist Chris Weston said the key influence for the day was from Europe, with the lack of action from ECB chief Mario Draghi leaving investors dissatisfied. “Mario Draghi and the European Central Bank gave traders and investors absolutely nothing new to work with,” he said. “This seems quite bizarre given they have lowered their inflation forecasts for 2017 to 1.2 per cent and while this is a mere rounding issue from its June forecast of 1.3 per cent, it simply pulls it further from their inflation mandate. “So, we have actually been left with more questions than certainties around ECB policy.” Such questions weighed heaviest on the big banks in local trade, with the big four all off around 1 per cent. The heaviest retreat was tracked at Commonwealth Bank as it slid 1.1 per cent, while ANZ outperformed in falling 0.7 per cent While the banks flailed, investors showed interest in the big resources companies after crude prices soared 4 per cent overnight and base metals largely ended in the black. BHP Billiton rallied 0.7 per cent to $20.40, Rio Tinto edged up less than 0.1 per cent to $48.03 and Fortescue bounced 0.6 per cent to $4.92. In energy, Santos surged 1.6 per cent to $4.145, Origin leapt 2.7 per cent to $5.27 as chief executive Grant King stepped down and Woodside bucked the trend to weaken 0.4 per cent to $27.89. In retail, Woolworths slumped 2.9 per cent on a bearish view from Morgan Stanley, Coles owner Wesfarmers slipped 1.4 per cent and Myer lost 1 per cent. Among other blue chips, Telstra eased 0.1 per cent to $5.105, while Qantas gave back 0.9 per cent to $3.30. Meanwhile, the Australian dollar was trading around US76.5c, steadying after a sharp sell-off during US trade. |
