The Australian stockmarket closed lower yesterday, also finishing down for the week and ending a run of five weeks of gains.
At the close yesterday, the benchmark S&P/ASX200 index was down 34.7 points, or 0.79 per cent, at 4349.0, while the broader All Ordinaries index was down 35.3 points, or 0.8 per cent, at 4376.5.
On the ASX 24, the September share price index futures contract was 36 points lower at 4332 with 21,061 contracts traded.
The sharemarket had dropped 0.4 per cent for the week but was still up 2 per cent in value this month after gaining 3.7 per cent last month.
Concerns about a slowdown in Asian growth have added to some extra selling of stocks, with the iron ore price at its lowest level since December 2009.
Steve Daghlian, a CommSec analyst, also noted comments by the Reserve Bank governor, Glenn Stevens, that he thought the resource investment boom as a share of economic growth was approaching a peak.
"However that is not necessarily bad because once that ends, actual export of resources shipments will pick up," he said.
Yesterday ended the busiest week of the earnings season, with retailer Woolworths announcing a net profit of $1.82 billion, down 14.5 per cent. Shares fell 48?, or 1.7 per cent to $29.
Fairfax shares took a bath, dropping 11 per cent to a record low 45.5?, on reports Gina Rinehart had tried to sell down her 15 per cent stake. The media company's stock slumped 10 per cent on Thursday when it reported a $2.73 billion full year net loss.
Coalminer Whitehaven posted an improved net profit of $62.5 million for the year but its shares dropped 11.2 per cent to $3.09, with magnate Nathan Tinkler dropping a $5.2 billion takeover bid.
Elsewhere, resources stocks dragged the market lower, which may be because of the iron ore price, with BHP Billiton dropping 32? to $33.09 and Rio Tinto down $2.38, or 4.4 per cent, to $51.80.
Fortescue Metals suffered heavy losses following a downgrade by broker Nomura, losing 26?, or more than 6 per cent, to $3.98.
The major banks were down but not by much, with the Commonwealth Bank down 24? to $54.90, ANZ 23? down at $24.77, Westpac down 12? to $24.65 and the National Australia Bank down 17? to $25.14.
National turnover was below average including 1.64 billion securities traded worth $3.92 billion, with 390 stocks up, 525 down and 340 unchanged.
Frequently Asked Questions about this Article…
Why did the Australian sharemarket close lower this week and break its five-week winning streak?
The market fell on concerns about slower Asian growth and a sharp fall in iron ore prices, plus remarks from the RBA governor suggesting the resource-investment boom may be peaking. Those factors hit resource stocks and ended a five-week run of gains, leaving the market down for the week.
How much did the benchmark ASX 200 and All Ordinaries fall on the day reported?
The S&P/ASX 200 closed down 34.7 points (0.79%) at 4,349.0, while the All Ordinaries finished down 35.3 points (0.8%) at 4,376.5.
What role did iron ore prices and Asian growth fears play in the market drop?
Iron ore hit its lowest level since December 2009, and worries about a slowdown in Asian growth added to selling pressure on resources stocks—one of the main drivers of the market decline.
How did major resources companies like BHP, Rio Tinto and Fortescue perform?
Resources stocks dragged the market lower: BHP Billiton fell to about $33.09, Rio Tinto dropped $2.38 (4.4%) to $51.80, and Fortescue Metals suffered heavy losses after a Nomura downgrade, falling to about $3.98 (more than 6%).
What happened to retailers and media companies during the earnings week?
Woolworths reported a $1.82 billion net profit, down 14.5%, and its shares slipped to about $29. Fairfax plunged roughly 11% to a record low after reports Gina Rinehart tried to sell down a 15% stake and following a $2.73 billion full-year net loss.
How did smaller miners and takeover activity affect share prices?
Coal miner Whitehaven posted an improved net profit of $62.5 million but its shares fell 11.2% to $3.09 after Nathan Tinkler dropped a $5.2 billion takeover bid, showing takeover news can move individual stocks sharply.
How did the major banks perform during the decline?
The big banks were down modestly rather than sharply: Commonwealth Bank was around $54.90, ANZ about $24.77, Westpac near $24.65 and National Australia Bank about $25.14.
What was trading activity like and what should everyday investors watch next?
Turnover was below average with 1.64 billion securities traded worth $3.92 billion and market breadth showing 390 stocks up, 525 down and 340 unchanged. With the busiest week of earnings season just ending, investors should watch upcoming company results, iron ore and resources sector moves, and Asian growth indicators for further market direction.
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