Australian stocks have seen red for the fourth day in five as investors shied away from the materials sector following a pullback in commodity prices.
At the close, the benchmark S&P/ASX 200 index slid 20.4 points, or 0.35 per cent, to 5,784.7, while the broader All Ordinaries index yielded 17.6 points, or 0.30 per cent, to 5,832.5.
Again a major name going ex-dividend hurt the broader market following yesterday’s drag from Commonwealth Bank.
“The materials sector alone dragged us into the red, with Rio Tinto going ex-dividend certainly not helping,” Gary Huxtable, client adviser at Atlantic Pacific Securities, said.
Rio tumbled 5.4 per cent to $65.40, although the weak reading went beyond just the ex-dividend factor, with futures markets pointing to a degree of “indecision” in iron ore prices.
“This indecision is an incentive for some to take profit, particularly as the strong results from BHP and Fortescue over the last couple of days were already priced in,” Mr Huxtable said.
Rio’s closest peer BHP skidded 2.7 per cent to $25.84, while pure-play iron ore miner Fortescue slumped 2.6 per cent to $6.80.
Australian investors remained focused on earnings season, although the most significant day — in terms of quantity of earnings reports — meant it was hard to keep up.
“Given 153 (of the top 200 companies) would have already reported by Friday, investors will have a clear picture of the corporate health of Australia,” CMC Markets chief market strategist Michael McCarthy added.
“Themes are emerging.
“A big lift in mining earnings is driving overall profit growth of around 25 per cent, but sales growth across all companies of around 3 per cent is more in line with economic data. Energy, healthcare, consumer services and financials all displayed earnings growth.”
Among the major names to impress after reporting today were Nine Entertainment, which bounded 7.3 per cent despite a heavy writedown to its free to air assets, Qantas, which leapt 5.4 per cent as its earnings held up well given rampant price discounting in aviation, and Crown, which soared 7.9 per cent on a renewed efficiency drive.
Disappointing results were seen from Flight Centre and Ardent Leisure, in contrast, with the former sliding 1.5 per cent on a guidance cut and the latter plunging 21.8 per cent on heavy writedowns.
Elsewhere among those reporting on Thursday, Iluka lost 1.8 per cent, Oz Minerals shed 3.3 per cent, Westfield retreated 1.2 per cent, Perpetual rose 5.6 per cent, Retail Food Group advanced 3.6 per cent and Kogan tacked on 0.3 per cent.
In energy, Santos lost 1.7 per cent to $3.96, while Woodside bucked the trend to climb 0.9 per cent to $31.69 despite oil price weakness.
In finance, the big four banks were mixed, with NAB, CBA and Westpac easing 0.3 epr cent, while ANZ lifting 1.2 per cent.
The retailers were in the news as they were seen as beneficiaries of changes to penalty rates.
“Fair Work Australia’s decision to cut Sunday penalty rates was quickly priced into the retailers such as Premier Investments, which are poised to benefit from the lower labour costs,” Mr Huxtable said.
Premier gained 1 per cent, while Woolworths gave back 0.4 per cent after yesterday’s surge and rival Wesfarmers gained 0.2 per cent. The latter two gained momentum following the Fair Work decision after a soft start to the session.
Elsewhere, telco giant Telstra backtracked 0.6 per cent to $4.82.
Meanwhile, the Australian dollar ended the local trading day at US77c, shrugging off a mixed capital expenditure report to end the session slightly higher.