SYDNEY: The Australian sharemarket dived more than 1 per cent today as falling banks more than offset a mining uptick for the second session in a row.
At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 was 63.9 points, or 1.13 per cent, lower at 5610.1, while the broader All Ordinaries index had fallen 59.5 points, or 1.05 per cent, to 5600.
After falling 0.61 per cent yesterday, financial stocks again drove the decline, with ANZ’s capital raising announcement reminding the market of the banks’ new and looming regulatory requirements. ANZ’s trading update — a 4.3 per cent rise in cash profit in the nine months to June — was also a concern to the market.
“[T]he financial trading update was … 2 per cent shy of expectations and there seems to be some concern about future profitability in the space,” IG chief markets analyst Chris Weston said.
Mr Weston also noted early signs of a momentum wane in the value ratio between financial stocks and the materials/mining sector, which has ballooned from 0.34 in 2012 to 0.75 today in favour of the former.
“This is a call I loathe given the trends that are taking place in commodities, but there is absolutely scope for short-term outperformance from mining stocks,” he said.
Elsewhere, there was little joy for investors on the local economic news front with Australia’s jobless rate jumping to its highest point since January, lifting to 6.3 per cent against market expectations of a rise to 6.1 per cent, and an official warning from the Reserve Bank of a period of falling house prices as the property market adjusts.
The financial sector was the worst, ending 1.71 per cent down overall with ANZ unchanged at $32.58 due to a trading halt, Commonwealth Bank down 3.23 per cent to $84.55, National Australia Bank off 2.18 per cent to $33.59 and Westpac retreating 3.04 per cent to $33.44.
