The sharemarket moved lower on Tuesday, led by energy and resources stocks, which fell as commodity prices reacted to weaker Chinese data and banks were sold off in light of the government’s response to the financial system inquiry.

At the close of trade, the benchmark S&P/ASX 200 was 0.65 per cent, or 34 points, lower at 5235.6 points.

The broader All Ordinaries index lost 0.6 per cent, or 33 points, to 5271.6.

In the absence of a strong lead from Wall Street, which closed flat overnight amid mixed third-quarter profit results, the miners proved the main drag on the index as commodities, including copper, iron ore and oil, fell in overnight trade.

Some of the weakness in oil prices, which saw Brent crude oil slipping 3.5 per cent to $US48.68 a barrel, may be attributed to the US and Europe’s reaction to Iran’s oil minister saying he foresaw no change in the Organisation of Petroleum Exporting Countries output despite weakening demand.

Meanwhile, metals prices fell as traders reacted to China’s slightly weaker gross domestic product reading, which came in at 6.9 per cent year-on-year for the third quarter, its slowest pace of growth since 2009.

BHP Billiton lost 3 per cent for the day, closing at $23.99. Rio Tinto lost 2.3 per cent to $52.14. Fortescue Metals Group, however, added 2.2 per cent to $2.35.

The energy sector was the worst-performing sector, down 3.25 per cent. In the mix was a fresh round of takeover speculation as Oil Search managing director said the company was open to “compelling” offers to shareholders.

Woodside Petroleum fell 5 per cent to $30.47, while Oil Search lost 1.75 per cent to $7.30. Santos fell 3.1 per cent to $5.29 and Origin Energy lost 2 per cent to $5.36.

The banks also slipped as investors lightened their holdings while they mulled the Turnbull government’s response to the financial system inquiry.

“There’s going to be demand for more capital on the bank buying sheets over the medium term, it’s a question of one, the quantum and two, the timing of that,” Patersons economist Tony Farnham said.

Commonwealth Bank of Australia lost 0.9 per cent to $75.73, Westpac Banking Corp fell 1.6 per cent to $30.85, National Australia Bank shed 0.6 per cent to $31.76 and ANZ Banking Group fell 1.6 per cent to $28.40.

The strongest sub-indices for the day were healthcare and telecommunications, with strong performances in Telstra and CSL buoying their respective sectors.

Telstra snapped a nine-day losing streak, closing 2.8 per cent higher at $5.45 to be the second-best-performing stock on the index. CSL climbed 1.5 per cent to $90.01.

Mr Farnham said it was possible Telstra had benefited from some of the selling in the big four banks as investors hunted for high-yielding stocks.

“The logical plan is to go to the retailers and the big telco,” Mr Farnham said.

Woolworths fell 0.5 per cent to $26.82, while Wesfarmers rose 0.5 per cent to $40.49.

The best-performing stock for the day was APN News & Media, which closed up 4 per cent to 52¢.

The worst-performing stocks were Western Areas, down 7.3 per cent to $2.43, and Paladin Energy, down 6.5 per cent to 21.5¢.

Australian Stock Report head of research Chis Conway said the market had become accustomed to moving on events and data, and a lack of catalysts led to a reasonably quiet day.

“Until the macro storm clouds that are hanging over the market [China, US Federal Reserve and global growth] begin to dissipate, expect more of the same,” he said.


By Vanessa Desloires

Source from Financial Review