Early gains wiped out after QBE's heavy profit downgrade
The benchmark S&P/ASX 200 Index fell 41.6 points, or 0.8 per cent, to 5144.4, while the broader All Ordinaries Index lost 37.6 points, or 0.7 per cent, to 5148.4.
The market actually opened higher after taking a strong lead from the US, where stocks rallied on Friday after the release of better than forecast jobs data, prompting speculation the Federal Reserve would start to taper its bond buying program sooner rather than later.
At the local close, the dollar was buying US91.04¢, up from US90.56¢ at Friday's close.
Financial services was the worst-performing sector, down 1.4 per cent as Australia's biggest insurer, QBE, plummeted on a profit downgrade and the big four banks extended their recent selloff.
QBE shares fell 22.3 per cent to $12 after emerging from a trading halt to warn it would suffer a $250 million reported net loss for the year. It was QBE's 10th consecutive profit downgrade.
Among QBE's competitors, Insurance Australia Group, owner of NRMA, dropped 1 per cent to $5.72, while AMP shed 2.3 per cent to $4.35.
An ANZ survey showed domestic job advertisements fell 0.8 per cent in November after recording close to no growth over the previous two months. November job ads were 10 per cent lower than a year ago.
Commonwealth Bank dipped 0.4 per cent to $74.90, while Westpac lost 1.3 per cent to $31.09. National Australia Bank fell 0.9 per cent to $33.17 and ANZ shed 0.8 per cent to $30.75.
Qantas Airways lost 3.4 per cent to 99.5¢, closing below $1 for the first time in 17 months, after it announced the closure of Jetstar's Darwin base. Corporate raiders are reportedly circling after Qantas lost its investment grade credit rating on Friday.
Telecoms was the best-performing sector, up 0.9 per cent as Telstra added 0.6 per cent to $5.01. TPG Telecom was the best-performing stock in the ASX 200, jumping 13.6 per cent to $4.68 after it acquired Telecom NZ's struggling subsidiary, AAPT, for $450 million.
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QBE's shares plummeted over 22% due to a profit warning, indicating a $250 million reported net loss for the year. This marked QBE's 10th consecutive profit downgrade, causing investor concern and a sharp decline in share value.
The Australian stock market fell as investors focused on QBE's profit warning. The S&P/ASX 200 Index dropped by 0.8%, and the broader All Ordinaries Index fell by 0.7%, reflecting the negative sentiment surrounding QBE's announcement.
QBE's profit downgrade significantly impacted the financial services sector, making it the worst-performing sector with a 1.4% decline. The announcement contributed to the extended selloff of Australia's big four banks.
Following QBE's announcement, Insurance Australia Group, the owner of NRMA, saw a 1% drop in its share price, while AMP's shares fell by 2.3%, indicating a broader impact on the insurance sector.
Despite the market downturn, the telecommunications sector was the best-performing sector, rising by 0.9%. Telstra's shares increased by 0.6%, and TPG Telecom saw a significant 13.6% jump after acquiring Telecom NZ's subsidiary, AAPT.
The big four banks experienced declines following QBE's profit warning. Commonwealth Bank dipped by 0.4%, Westpac lost 1.3%, National Australia Bank fell by 0.9%, and ANZ shed 0.8%.
Qantas Airways' stock fell by 3.4%, closing below $1 for the first time in 17 months. This decline was influenced by the closure of Jetstar's Darwin base and the loss of Qantas' investment-grade credit rating.
Broader economic indicators included a 0.8% fall in domestic job advertisements in November, with job ads being 10% lower than a year ago. Additionally, the Australian dollar rose slightly, buying US91.04¢, up from US90.56¢ at the previous close.
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