Stocks close lower on watery GDP figures
At the close on Wednesday, the benchmark S&P/ASX 200 Index was down 65.6 points, or 1.34 per cent, at 4835.2, while the broader All Ordinaries fell 61.5 points, or 1.26 per cent, to 4825.2.
The market posted its ninth fall in 12 trading days, following Wall Street's negative lead.
CMC Markets analyst Michael McCarthy said disappointing GDP figures and a weaker outlook in Japan were weighing on sentiment. "We could see further short-term moves down," he said.
Prime Minister Shinzo Abe has outlined a blueprint for rejuvenating Japan's ailing economy, with regulatory changes to bring more women into the workforce, and coaxing companies into investing more and promoting innovation.
Meanwhile, figures released on Wednesday showed Australia's GDP grew by 0.6 per cent in the first three months of the year, and at an annual rate of 2.5 per cent, the first time it was below 3 per cent since the last quarter of 2011.
The big banks represent four of the six largest stocks on the ASX and their falls drove down the overall market.
ANZ was down 71¢ at $27.20, CBA fell 90¢ to $66.25, NAB was 66¢ weaker at $28.95 and Westpac was off 76¢ at $28.19.
The two big supermarket owners were also punished, with Wesfarmers 33¢ lower at $38.58 and Woolworths down 23¢ to $32.32.
BHP fell 47¢ to $33.79, while Rio slipped 77¢ to $54.36.
Gold stocks were also weaker, with Goldminer Newcrest falling 80¢ to $14.35.
Billabong shares continued to slide after Tuesday's plunge when the company lost half its market capitalisation after flagging asset sales to reduce debt as takeover talks collapsed. It was down 6.5 per cent at 21.5¢.
Bond futures prices rose after the release of the disappointing growth figures, which raised the prospect of more rate cuts by the central bank.
JPMorgan interest rate strategist Sally Auld said a rise in three-year futures prices came after investment bank Goldman Sachs issued a report saying the Reserve Bank was likely to cut the cash rate in July.
Ms Auld said markets were now focused on the release of US employment reports later this week. AAP
Frequently Asked Questions about this Article…
The market fell after disappointing GDP figures and a weaker outlook in Japan dented sentiment, prompting investors to sell down big banking stocks. Negative leads from Wall Street also contributed to the fall.
The S&P/ASX 200 dropped 65.6 points, or 1.34%, to 4,835.2, while the All Ordinaries fell 61.5 points, or 1.26%, to 4,825.2.
Australia's GDP grew 0.6% in the first quarter and 2.5% on an annual basis — the first time annual growth was below 3% since late 2011. Weaker-than-expected growth weighed on market sentiment because it raises concerns about corporate earnings and the prospect of monetary easing.
The big four banks led the falls: ANZ slipped 71¢ to $27.20, Commonwealth Bank (CBA) fell 90¢ to $66.25, NAB was 66¢ weaker at $28.95, and Westpac dropped 76¢ to $28.19.
Supermarket owners were punished — Wesfarmers was down 33¢ at $38.58 and Woolworths fell 23¢ to $32.32. Miners also slipped: BHP dropped 47¢ to $33.79 and Rio Tinto eased 77¢ to $54.36, while gold miner Newcrest fell 80¢ to $14.35.
Billabong shares kept sliding after a sharp plunge the previous day, when the company lost about half its market capitalisation after flagging asset sales to reduce debt amid collapsed takeover talks. On the day in question the stock was down 6.5% at 21.5¢.
Yes. Bond futures rose after the disappointing growth figures, which increased expectations of possible rate cuts. JPMorgan strategist Sally Auld noted a rise in three-year futures after Goldman Sachs suggested the Reserve Bank might cut the cash rate in July.
Markets were focused on upcoming US employment reports later in the week, which investors saw as important for global risk sentiment and interest-rate expectations.
Call 1300 880 160
Start a chat
Schedule a call
