Australia’s sharemarket dropped for the third straight trading day on Tuesday, with a US holiday and investors awaiting a key piece of economic data that could determine future rate cuts.
The benchmark ASX 200 slid 27.10 points, or 0.3 per cent, to trade at 8900.60 points. Throughout the trading day it fell below the psychological 8900 point barrier.
The broader All Ordinaries fell 28.80 points or 0.31 per cent to 9168.
Australia’s dollar slipped 0.21 per cent and is now buying 65.42 US cents.
Nine of the 11 sectors finished lower, with financials and information technology a rare bright spot on the market.
Camera IconAustralia’s market slipped on a quiet day of trading. NewsWire / Jeremy Piper Credit: News Corp Australia
Healthcare stocks continued their sell-off and as a sector are now down 14 per cent since CSL announced its results two weeks ago.
CSL shares slumped a further 1.22 per cent to $207.71, Sigma Healthcare fell 1.44 per cent to $3.08, Pro Medicus slid 1.66 per cent to $294.01 and Cochlear finished in the red down 1.14 per cent to $297.23.
A handful of businesses including Wesfarmers, Woolworths, Santos and Bendigo Adelaide Bank also traded ex-dividends, weighing on the day’s results.
Shareholders who buy the stocks after this date will not receive the next dividend payment, with the shares usually falling by about the dividend amount.
Wesfarmers shares are down 2.89 per cent to $88.25, Woolworths slumped 3.13 per cent to $27.85, Santos slid 1.38 per cent to $7.89 and Bendigo Adelaide Bank finished $3.78 per cent lower to $12.72.
The big four banks were a rare bright spot.
CBA shares gained 0.89 per cent to $170.46, Westpac lifted 0.84 per cent to $38.57 and NAB jumped 0.99 per cent to $42.96.
ANZ was the outlier and slipped 0.27 per cent to $33.48.
The slow day of trading came as investors eagerly await the latest GDP figures, which will be released on Wednesday.
CBA head of Australian economics Belinda Allen has revised her GDP forecasts to 0.5 per cent for the quarter or 1.6 per cent for the year.
Camera IconNine of the 11 sectors finished in the red. NewsWire / Max Mason-Hubers Credit: News Corp Australia
ANZ forecasts GDP to grow 0.4 per cent for the quarter and 1.5 per cent growth for the year.
IG market analyst Tony Sycamore said if the bank’s forecasts were correct it would open the door to further interest rate relief.
“If this forecast proves accurate, it will support the case for further easing of RBA monetary policy as it reaffirms the idea that the Australian economy is growing at a pace significantly below its potential growth rate of 2.5 to three per cent,” he said.
Gold prices continued their march higher, this time passing the $US3500 an ounce (A$5355) on Tuesday, as investors sought out safe havens in the face of US President Donald Trump’s fight with the Federal Reserve.
The price of silver also hit its highest level in almost 15 years.
Capital.com senior financial market analyst Kyle Rodda said investors were buying the safe haven on a weaker economic backdrop, expectations of rate relief from the US federal reserve and a confidence crisis caused by Mr Trump.
“Another factor is the festering confidence crisis in dollar assets because of Trump’s attack on Fed independence, with gold and silver benefiting from something of a TINA (there is no alternative) trade,” he said.
In company news, shares in KFC operator Collins Food soared seven per cent to $10.26 as the business told investors sales were up 6.7 per cent for the first 18 weeks of the financial year.
PolyNovo climbed 10.3 per cent to $1.45 after telling the market the business could benefit from proposed changes to the US Medicare Reimbursement for outpatient wound care.
Invictus Energy shares soared 29 per cent to $0.23 after the energy explorer announced that its Cabora Bassa Project in Zimbabwe was given National Project Status.
