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Australia shares steady, as financials' gains offset weak resource stocks
May 15, 2017 / 3:29 AM / 4 months ago

Australia shares steady, as financials' gains offset weak resource stocks

May 15 - Australian shares traded little changed in a narrow range on Monday, with gains in financials offset by a slump in materials.

The S&P/ASX 200 index dipped 0.1 percent or 5.902 points to 5831 by 0256 GMT. The benchmark fell 0.7 percent on Friday.

The market took its cue from Wall Street, which ended lower on Friday as tepid economic data and nerves over under-performing department stores weighed on sentiment.

Soft retail sales and monthly inflation data raised concerns of slow economic growth, but also raised some doubt over whether the Federal Reserve could maintain its hawkish outlook for interest rates this year.

“Over the past week some disappoinment was seen in the growth picture probably on a global basis and that’s flowing through to our markets,” said Damien Hennessy of Heuristic Investment Systems.

“Domestic growth outlook is providing a headwind to the local market. Risks around the economic outlook particlularly on the domestic level has soured a little.”

Financials dominated gains in the benchmark with the “Big 4” banks heading the list, gaining between 0.5 to 0.8 percent.

Australian newspaper publisher Fairfax Media Ltd which surged as much as 8.4 percent to its highest in over six years after receiving a revised A$2.76 billion cash offer from U.S. private equity firm TPG Capital Management and the Ontario Teachers’ Pension Plan Board (OTPP) for all of the company.

All sectors except the financial and telecom stocks were in the red with mining giants BHP Billiton and Rio Tinto , both down nearly one percent, draining the index the most.

“Iron ore has come off a long way over the past month and thats continuing to undermine the basic materials sector,” Hennessy said.

Iron ore dropped for the seventh week to near four month lows, dragged down by worries of weak demand in China.

The country’s biggest gold producer Newcrest Mining snapped four days of gains to slip over 1.2 percent as gold prices failed to run up on either the weaker-than-expected U.S. economic data or a missile test by North Korea.

New Zealand’s benchmark S&P/NZX 50 index nudged 0.2 percent or 16.83 points lower to 7435.55, despite a surge in the country’s retail sales in April.

Utilities were among the few gainers in the index while healthcare and industrial stocks dragged the index down.

Kathmandu Holdings and Air New Zealand Ltd were the top decliners while Z Energy Ltd led gainers.

Reporting by Hanna Paul; Additional Reporting by Susan Mathew; Editing by Editing by Simon Cameron-Moore

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