THE sharemarket has started the week with a modest loss, failing to jump on the bandwagon of positive international news, as gains among miners offset losses among banks.
The benchmark S&P/ASX200 slipped 9.7 points, or 0.2 per cent, to 4573.5, while the broader All Ordinaries lost 7.1 points, or 0.2 per cent to 4588.
Gold miners fell 2.8 per cent, financials dropped 0.5 per cent and consumer staples were down 0.7 per cent. Telecommunications jumped 0.9 per cent and materials inched up 0.2 per cent.
"We were expecting a little bit more of a pick-up, especially since we saw some great gains coming through in Japan today," said the CommSec markets analyst Juliette Saly.
Japan's Nikkei index rose more than 1 per cent to eight-month highs after the election of the conservative Liberal Democratic Party, which supports further monetary easing, over the weekend.
This caused the yen to weaken against both the US dollar and the Australian dollar, with the local currency fetching 88.7 yen in late trading. The dollar was also up against its American counterpart, trading at around $US1.0540.
Ms Saly said the market failed to gain on the news of progress in "fiscal cliff" talks between US President Barack Obama and House of Representatives Speaker John Boehner.
Among other concessions, Mr Boehner has offered an increase in the tax rate for individuals making more than $US1 million a year in return for $US1 trillion in spending cuts on government benefit programs.
Democrats rejected the offer, but the fact that Republicans were willing to concede a higher tax rate for the rich showed that talks were moving forward.
Despite the strong performance of the miners in recent weeks, ANZ drastically cut its interest rates forecast for next year, citing weak growth in the mining sector, higher unemployment and the strong dollar as its reason behind the 100 basis point drop.
Locally, the major miners were up again. BHP rose 0.8 per cent to $36.35, while Rio Tinto rose 0.8 per cent to $63.52.
Fortescue jumped 3.7 per cent to $4.47, as investors continued to reward the iron ore miner, which is seen to be making an effort to pay down its large debt.
"[Fortescue's] share price has been up about 15 per cent since the beginning of December, on the fact that its really trying to get its $6 billion debt burden down," said Ms Saly.
Along with selling out its share in the Nullagine iron ore project for $190 million, the company said on Monday it would also sell a minority stake in its mining infrastructure assets, which include rails and ports. These assets have been valued between $US4 billion and $US6 billion.
Shares in Billabong jumped after media reports that Paul Naude, president of the American arm of the company, had offered $1.10 per share for the company.
Before entering a trading halt, shares in the surfwear retailer jumped 4.8 per cent to 98?.
Westpac fell 0.9 per cent to $25.75, ANZ fell 0.6 per cent to$24.49, CBA fell 0.6 per cent to $61.29 and NAB fell 0.5 per cent to $24.48.
Frequently Asked Questions about this Article…
What happened to the ASX today and how did the S&P/ASX 200 perform?
The sharemarket started the week with a modest loss: the S&P/ASX 200 slipped 9.7 points (about 0.2%) to 4,573.5, while the broader All Ordinaries fell 7.1 points (around 0.2%) to 4,588. Gains among major miners were offset by falls in bank stocks, leaving the local market unable to follow stronger international moves.
Which ASX sectors led gains and which sectors fell?
Sector movements were mixed: gold miners fell 2.8%, financials dropped about 0.5% and consumer staples were down roughly 0.7%. By contrast telecommunications jumped about 0.9% and materials inched up around 0.2% — while the big diversified miners showed gains.
How did major miners like BHP and Rio Tinto perform on the ASX?
Major miners were up: BHP rose about 0.8% to $36.35 and Rio Tinto also gained about 0.8% to $63.52. The miner sector overall helped offset weakness elsewhere in the market.
Why did Fortescue shares jump and what is Fortescue doing about its debt?
Fortescue jumped 3.7% to $4.47 as investors rewarded the iron‑ore miner's push to reduce a roughly $6 billion debt burden. Recent moves include selling its share in the Nullagine project for $190 million and planning to sell a minority stake in mining infrastructure assets (rails and ports) that have been valued between US$4 billion and US$6 billion.
How did the big Australian banks trade today (Westpac, ANZ, CBA, NAB)?
Major bank shares fell: Westpac declined about 0.9% to $25.75, ANZ fell roughly 0.6% to $24.49, Commonwealth Bank (CBA) slipped about 0.6% to $61.29 and NAB dropped about 0.5% to $24.48, contributing to the market's modest overall loss.
What did ANZ say about interest rate forecasts and why is that relevant for investors?
ANZ drastically cut its interest‑rate forecast for next year by 100 basis points, citing weak growth in the mining sector, higher unemployment and a strong dollar. For everyday investors, large forecast revisions from major banks can signal shifting expectations for economic growth and influence bond yields, mortgage rates and bank profitability.
Did international news — like Japan’s election or US fiscal talks — affect the ASX and currency markets?
International news had mixed influence. Japan’s Nikkei rose more than 1% to eight‑month highs after the Liberal Democratic Party’s election victory, which supports further monetary easing and weakened the yen. That pushed the Australian dollar to about 88.7 yen and the AUD was trading around US$1.0540. Meanwhile, progress in US 'fiscal cliff' talks (including an offer from Rep. Boehner on higher taxes for the very rich in return for spending cuts) failed to spark a local market rally.
What happened with Billabong shares and is there takeover interest?
Billabong shares jumped after media reports that Paul Naude, president of the company's American arm, had offered $1.10 per share. The surfwear retailer's stock rose about 4.8% before the company entered a trading halt while the situation was clarified.
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