Stocks down 1% as gloom increases

THE sharemarket dropped to a six-day low as investors reacted to Chinese data showing continued contraction in the country's manufacturing sector. There was also disappointment with the outcome of the US Federal Reserve policy meeting overnight.

By InvestSMART · 22 Jun 2012

By InvestSMART ·
22 Jun 2012

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The S&P/ASX 200 Index finished down 44.8 points, or 1.1 per cent, at 4087.6.

Gold was the worst-performing sector, dropping 3.2 per cent. Energy fell 2.6 per cent, materials lost 1.9 per cent, financials closed down 0.8 per cent and consumer discretionary slipped 0.4 per cent.

CommSec analyst Juliette Saly said investors had been hoping for new quantitative easing measures from the Fed. Instead it was a continuation of its current bond-swapping, asset-purchasing program aimed at encouraging borrowing and spending by lowering long-term interest rates.

Falls in the oil price hurt the energy sector and a profit downgrade by surfwear retailer Billabong 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, closing 5?, or 4.4 per cent, weaker at $11.57, and Woodside Petroleum shed 67?, or 2.1 per cent, to $32.08.

Media stocks were mixed. News Corp firmed 4? to $20.19 and its non-voting stock was 10? stronger at $20. Fairfax Media was flat at 59?.

Struggling regional media publisher APN News & Media was down 2.5? at 71? after paying $36 million for an 82 per cent stake in online retailer brand Exclusive.

In the resource sector, BHP Billiton lost 40? to $32.20 and Rio Tinto eased 82? to $56.90.

The big banks were all lower. ANZ fell 17? to $21.58, NAB 31? to $23.14, Westpac 22? to $20.98 and Commonwealth 31? to $51.78.

Myer lost 5 per cent to a record low of $1.69. Electronics retailer JB Hi-Fi fell 1.8 per cent to $8.35, its lowest in 3 years.

Drug company Acrux fell 69?, or 14.5 per cent, to $4.07 after it said the US patent examiner had raised objections to claims related to Acrux's underarm-administration patent application.

The spot gold price was down $US17.32 at $US1601.36 an ounce at the Sydney close.

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Frequently Asked Questions about this Article…

Why did the Australian sharemarket fall and how did the S&P/ASX 200 finish?

The market fell after Chinese data showed continued contraction in manufacturing and investors were disappointed by the US Federal Reserve meeting outcome. The S&P/ASX 200 closed down 44.8 points, or about 1.1%, at 4,087.6.

Which sectors were the worst performers and how did the gold sector fare?

Gold was the worst-performing sector, dropping about 3.2%. Energy, materials and financials also weakened — energy fell around 2.6%, materials lost roughly 1.9% and financials were down about 0.8%, while consumer discretionary slipped around 0.4%.

How did the US Federal Reserve decision affect investor sentiment in Australia?

Investors had hoped for new quantitative easing from the Fed but instead saw a continuation of its existing bond-swapping and asset-purchasing program. That disappointment contributed to selling pressure on Australian stocks.

What happened to oil and gas stocks like Santos and Woodside?

Falling oil prices weighed on the energy sector. Santos led the declines and closed weaker at $11.57, while Woodside Petroleum also eased to $32.08.

How did Australia’s big banks perform on the day?

All of the major banks fell. ANZ closed at $21.58, NAB at $23.14, Westpac at $20.98 and Commonwealth Bank at $51.78 as the broader financial sector slipped.

Which individual company headlines moved shares (Billabong, Acrux, Myer, JB Hi‑Fi, APN)?

A profit downgrade at surfwear retailer Billabong hit the sector. Drug company Acrux dropped sharply after a US patent examiner raised objections to its underarm‑administration patent claims, closing at $4.07. Myer fell to a record low of $1.69, JB Hi‑Fi slid to $8.35 (a three‑year low), and regional publisher APN News & Media fell after paying $36 million for an 82% stake in online retailer Exclusive.

What happened to major miners such as BHP Billiton and Rio Tinto?

Resource stocks eased on the day. BHP Billiton closed at $32.20 and Rio Tinto finished at $56.90, contributing to weakness in the materials/resource sector.

How did the spot gold price move and what was the closing level?

Spot gold fell during the session, down US$17.32 at the Sydney close to US$1,601.36 an ounce, reflecting weakness in the gold sector and wider market sentiment.