Telcos buck trend as market hit by losses
Stocks fell more than 1 per cent in the morning, but the market clawed back half its losses thanks to a strong performance from telecommunications companies.
The benchmark S&P/ASX 200 Index lost 23.6 points, or 0.5 per cent, to 4959.9, while the broader All Ordinaries shed 25.7 points, or 0.5 per cent, to 4938.6.
Materials slumped 1.5 per cent as miners BHP Billiton and Rio Tinto shed 1 per cent and 2.6 per cent respectively after Shanghai copper slipped and became mired near last week's lows.
A senior FX strategist at Royal Bank of Scotland, Greg Gibbs, said the recent disappointing growth in China could be the "new norm", and we should expect to see growth closer to 7 per cent.
"My impression is that clients' confidence in the Chinese economy has wavered and they are expecting this to be a relatively weak year in China," Mr Gibbs said.
Retailers finished weaker, with the consumer discretionary sector losing 1.1 per cent.
David Jones lost 0.8 per cent after it reported a 3.4 per cent fall in its third-quarter sales. Myer dipped 1.2 per cent while electronic goods and entertainment retailer JB Hi-Fi slipped 0.1 per cent.
Financials dragged on the market, slipping 0.2 per cent, as investors sold banks after a recent stellar performance across the sector on the back of strong earnings reports and high dividend yields.
Commonwealth Bank fell 0.8 per cent, while Westpac dipped 0.3 per cent. ANZ bucked the trend, rising 0.6 per cent after saying it would outsource 70 call-centre positions to New Zealand to improve profit.
Biotechnology firm CSL lost 0.9 per cent, while Woolworths dropped 1.1 per cent to trade at three-month lows, and Wesfarmers slipped 0.3 per cent to six-week lows.
Telcos bucked the trend, rising 0.7 per cent.
The market has now closed lower for the fifth-straight session, with the S&P/ASX 200 plumbing a five-week low.
In Asian markets broadly, Japanese volatility dominated proceedings again with the Nikkei dropping a further 3.2 per cent.
Australia's dollar, meanwhile, provided a reprieve for traders, steadying around US96¢.
Frequently Asked Questions about this Article…
The market fell amid renewed concerns about Chinese growth and volatility in the Japanese sharemarket. The S&P/ASX 200 lost 23.6 points (0.5%) to 4,959.9 and the All Ordinaries slipped 25.7 points (0.5%) to 4,938.6, with the ASX200 hitting a five-week low.
Chinese growth concerns weighed on commodities: the materials sector slumped about 1.5% after Shanghai copper slipped and hovered near last week's lows. Major miners were weaker — BHP Billiton fell around 1% and Rio Tinto dropped about 2.6%.
The consumer discretionary sector lost roughly 1.1%. David Jones fell 0.8% after reporting a 3.4% fall in third‑quarter sales, Myer dipped 1.2%, and JB Hi‑Fi slipped 0.1% — all indicators of softer retail demand that investors often watch for signs of consumer weakness.
Financials overall slipped about 0.2% as some investors took profits after recent gains. Commonwealth Bank fell 0.8% and Westpac dipped 0.3%, while ANZ bucked the trend, rising 0.6% after announcing it would outsource 70 call‑centre positions to New Zealand to improve profit.
Telcos rose around 0.7% and provided a boost to the market, helping the ASX claw back roughly half of its morning losses. The telecommunication sector's resilience offset weakness elsewhere in the market that session.
Biotech CSL fell about 0.9%. Woolworths dropped roughly 1.1% to trade at three‑month lows, and Wesfarmers slipped about 0.3% to six‑week lows — reflecting selective selling across large-cap consumer and healthcare names.
Japanese volatility dominated regional trading with the Nikkei down about 3.2%, which fed into risk sentiment across markets. The Australian dollar provided some relief for traders, steadying around US96¢ (about US$0.96) during the session.
Keep an eye on Chinese growth data and commodity prices (for example, Shanghai copper), Japanese market volatility (Nikkei moves), company‑level retail and earnings updates, and the AUD/USD exchange rate — all of which influenced the ASX session described in the article.
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