THE Australian sharemarket dropped to a six-day low as Chinese data showed the country's manufacturing sector continuing to shrink and investors were disappointed with the outcome of the US Federal Reserve policy meeting overnight.
The benchmark S&P/ASX200 index was down 44.8 points, or 1.1 per cent, at 4087.6, while the broader All Ordinaries index was down 43.1 points, or 1 per cent, at 4133.7.
Gold was the worst-performing sector, falling 3.2 per cent. Energy fell 2.6 per cent, materials fell 1.9 per cent, financials fell 0.8 per cent and consumer discretionary fell 0.4 per cent.
A CommSec analyst, Juliette Saly, said investors had been hoping for new quantitative easing measures from the US Fed. Instead it got a continuation of its present bond-swapping, asset-purchasing program that aims to encourage borrowing and spending by reducing long-term interest rates.
Falls in the oil price affected the energy sector and a profit downgrade by the retailer Billabong helped cast a pall over that sector. "There was not a lot of positive news to really help investors out today and it looks like Wall Street might sell off again tonight," Ms Saly said.
Oil and gas company Santos led the falls, falling 4.4 per cent, or 5?, to $11.57. Woodside Petroleum fell 67?, or 2.05 per cent, to $32.08.
Media stocks were up slightly in a turbulent week for the sector that has involved restructures, mass redundancies and takeovers. News Corp rose 4? to $20.19, while its non-voting stock rose 10? to $20.
News is seeking to buy the 50 per cent of Consolidated Media Holdings that it does not already own. The takeover target rose 2? to $3.40. Shares in Fairfax Media, the publisher of The Sydney Morning Herald, were flat at 59?.
The struggling regional media publisher APN News & Media was down 2.5? at 71? after paying $36 million for an 82 per cent stake in the online retailer brandsExclusive.
Network Ten rose 1.9 per cent to 52.5?. A report from CLSA said the bid for pay TV assets from News Corp this week might make Ten seem more attractive.
In the resources sector, the global miner BHP Billiton fell 40? to $32.20, while its rival Rio Tinto fell 82? to $56.90.
Among the major banks, ANZ fell 17? to $21.58, National Australia Bank fell 31? to $23.14, Westpac fell 22? to $20.98 and Commonwealth Bank fell 31? to $51.78.
The surfwear retail company Billabong was in a trading halt as it launched a heavily discounted $225 million fund-raising from its shareholders. Its shares last traded at $1.83.
The toy distributor Funtastic was also in a trading halt after it said it intended to raise up to $24.6 million in order to reduce debt. Funtastic last traded at 16?.
The department store chain Myer fell 5 per cent to a record low of $1.69. The retailer JB Hi-Fi fell 1.8 per cent to $8.35.
National turnover was 1.93 billion shares worth $6.63 billion, with 362 stocks up, 619 down and 406 unchanged.
Drug company Acrux fell 14.5 per cent to $4.07 after it said the US patent examiner raised objections to claims related to Acrux's underarm administration patent application.
Frequently Asked Questions about this Article…
Why did the Australian sharemarket drop to a six-day low?
The market fell after weak Chinese manufacturing data showed the sector was still contracting, and investors were disappointed by the US Federal Reserve meeting outcome — the Fed continued its existing bond‑swapping/asset‑purchasing program rather than introducing new quantitative easing. These factors combined to push the benchmark S&P/ASX200 down 44.8 points to 4,087.6 and the All Ordinaries to 4,133.7.
How did the US Federal Reserve decision affect ASX sectors and investor sentiment?
Investors had hoped for new quantitative easing from the Fed but instead saw a continuation of its current asset‑purchasing bond‑swap program. That disappointment weighed on sentiment, contributing to sector declines across the market and increasing the risk of further selling, according to CommSec commentary in the article.
Why were gold shares the worst-performing sector on the day?
Gold was the weakest sector, falling 3.2% on the day. The article links the broader market weakness — driven by geopolitics, central bank policy disappointment and risk‑off sentiment — to pressure on gold stocks within the ASX.
How did oil price moves impact the energy sector and specific energy stocks?
Falls in the oil price weighed on the energy sector, which fell 2.6% overall. Oil and gas company Santos led declines, falling about 4.4% to $11.57, while Woodside Petroleum also slipped (around a 2% decline), showing how lower oil prices hit producer share prices.
What happened to major banks during the sell‑off?
Major banks were down on the day. The article reports share prices moved lower for the big four, with ANZ at $21.58, National Australia Bank at $23.14, Westpac at $20.98 and Commonwealth Bank at $51.78, reflecting the broader market pullback.
Were there any notable corporate moves in the media sector that investors should know about?
Yes. News Corp rose after reports it is seeking to buy the remaining 50% of Consolidated Media Holdings that it doesn’t already own; Consolidated Media Holdings rose as a takeover target. Media names were slightly up overall despite a turbulent week of restructures, redundancies and takeover activity, and Network Ten rose amid commentary that recent bids could make its pay‑TV assets more attractive.
Why were Billabong and Funtastic placed in trading halts, and what did that mean for investors?
Billabong was in a trading halt as it launched a heavily discounted $225 million fundraising from shareholders — its shares last traded at $1.83. Funtastic was also halted after announcing it intended to raise up to $24.6 million to reduce debt. Trading halts pause trading so companies can manage market disclosure during capital‑raising or material announcements.
What happened with drug company Acrux and how did the market react?
Acrux fell 14.5% to $4.07 after the US patent examiner raised objections to claims related to Acrux’s underarm administration patent application. The patent examiner's objections prompted investor concern and a sharp share price reaction.
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