Shares moved lower over the past week as mining, oil and gas, and resource services stocks suffered from a bleak outlook for new investment. Gains by the big four banks were not enough to lift the index.
The S&P/ASX 200 Index lost 0.3 per cent over the week to close at 5320 points. In a mostly quiet trading session on Friday, the index dropped 14.3 points, or 0.3 per cent, while the broader All Ordinaries shed 12.3 points, or 0.2 per cent, to 5314.3.
GrainCorp shares plummeted 22.1 per cent to $8.72 following a decision by the government to block a $3 billion takeover from US grain giant Archer Daniels Midland.
Over the past five trading sessions local shares moved lower despite mostly strong leads from offshore. In the US, the S&P 500 and Dow Jones scaled new highs following a series of economic indicators that the housing and employment markets are strengthening.
"As the US recovery continues, how the Federal Reserve manages a reduction in stimulus, which is currently fuelling global liquidity, will be the most important global macro-economic theme over the coming year," Magellan Asset Management portfolio manager Dom Giuliano said.
Energy was the worst-performing sector over the week, down 2.5 per cent as the crude oil price dipped 19 cents to $US110.86 a barrel. Australia's biggest oil producer Woodside Petroleum lost 2.2 per cent to $37.40, while other major players Santos, Oil Search and Origin Energy also finished lower.
The mining sector was mostly lower despite the spot price for iron ore, landed in China, only dipping 10 cents to $US136.40 a tonne.
On Wednesday a Bureau of Resources and Energy Economics report said the number of new mining projects approved in the six months to October 31 was the lowest in more than a decade, and predicted more major projects will be shelved or delayed over the next three years. However, the report also noted production is still increasing.
Australian Bureau of Statistics figures release on Thursday showed an unexpected rise in business investment during the September quarter, up 3.6 per cent against expectations for a 1.2 per cent fall. Most surprising was a 4 per cent rise in mining investment. But mining companies were much less likely to be planning to make new investments this quarter.
Index heavyweight BHP Billiton dropped 1.2 per cent to $37.39 over the week. However, Rio Tinto gained 1.2 per cent to $66.06, as investors endorsed a decision to close its loss-making Gove alumina plant.
The closure of Gove was good news for Alumina which jumped 7.3 per cent to $1.02. Also bucking the downward trend in the mining sector was Whitehaven Coal, up 6.8 per cent to $1.62.
Gold stocks were mostly lower as the spot price for the precious metal dropped to $US1242.78 an ounce at Friday's local close. Australia's biggest goldminer, Newcrest Mining, lost 9.9 per cent to $7.69. However, Oceanagold surged 8.8 per cent to $1.80 after finalising a takeover of Toronto-listed gold producer Pacific Rim Mining which has assets in El Salvador on Thursday. Mining services business Forge Group plummeted 82 per cent to 75 cents, after emerging from a three-week trading halt to reveal a $127 million write-down. "The mining companies probably still have more cost cutting initiatives ahead so the outlook is very unclear for the mining services sector," Maple-Brown Abbott chief investment officer Garth Rossler said.
Banks stocks were the strongest part of the market over the week as the big four all closed higher. Commonwealth Bank of Australia rose 1.7 per cent to $77.82, while National Australia Bank added 1.9 per cent to $34.58. Westpac Banking Corporation gained 1.2 per cent to $32.88, and ANZ Banking Group rose 0.7 per cent at $31.90.
In the food and liquor sector Wesfarmers fell 2.6 per cent at $42.92, while Woolworths shed 0.2 per cent at $33.69. Telstra Corporation was unchanged at $5.06.
Information technology was the best-performing sector up 1.2 per cent as online jobs advertiser Seek climbed 9.1 per cent to $13.37 after revealing plans to divest two of its businesses, and Computershare added 1.1 per cent to $10.89.
"One of the themes of annual general meeting season has been a soft outlook for first half 2014 earnings expressed by some of the less cyclical companies," Mr Rossler said.