SYDNEY: The Australian sharemarket retreated decisively for the first time this week, with sentiment driven firstly by a US Federal Reserve statement pointing towards a possible tightening this year and secondly a disappointing Woolworths sales report.
At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 68.3 points, or 1.28 per cent, to 5266.9, while the broader All Ordinaries fell 64.2 points, or 1.19 per cent, to 5374.4.
Shares gained ground early before fading after the Federal Reserve overnight chose to hold rates steady, while hinting at the likelihood of a 2015 rate hike, which would be the first upward move in more than seven years.
But IG market analyst Angus Nicholson said Woolworths had been the major driver of negative sentiment across a volatile day of trading, which was also categorised by sectoral divergence.
Woolworths report “managed to disappoint on all fronts”, he said, most notably its expectation that first-half net profit after tax before significant items would plunge by 28 to 35 per cent. ANZ meanwhile delivered a full-year profit result just short of expectations.
Mr Nicholson said a bright spot had been the performance of Blackmores — among a small group of Australian equities dubbed “new China” stocks for their exposure to the “more mature and discerning Chinese consumer”.
“While growth continues to slow in China, elements of the consumer market continue to see outsized growth,” he said. “The big question is, how long will the rally continue for these stocks.”
In economic news, the Australian Bureau of Statistics found that export prices were flat in the latest quarter against expectations of a 0.6 per cent rise, while import prices rose across the period.
Elsewhere, a National Australia Bank survey found sentiment pointing to a further softening of Australia’s housing market, with price growth and rents scaled back in most states.
Consumer staples were hammered after Woolworths’ announcement, off 5.36 per cent.
The supermarket giant’s shares ended down 9.76 per cent to $24.70 after having previously opened 7 per cent to the negative.
Wesfarmers fell 4.31 per cent to $40.18 but Blackmores was up 12.9 per cent to $175.51.
Banking shares were initially leading the market upwards after ANZ’s full-year result hit a new record-high, but had switched by noon to be off 0.3 per cent before closing down 0.96 per cent.
ANZ shares had swung into the red at noon after opening up 0.8 per cent after it unveiled a slightly less than expected 1 per cent lift in cash earnings for the year. By close, the stock was down 2.02 per cent to $28.17.
