The Australian sharemarket has faded into a weak close, with investors failing to see many bargains in the wake of the market’s worst week in 14.
Traders shied away from major stocks as the session wore on, with soft retail sales weighing on the retail industry.
By the 4.15pm (AEDT) official market close, the benchmark S&P/ASX 200 index had edged down 6 points, or 0.11 per cent, to 5,615.6, while the broader All Ordinaries index had dipped 7.1 points, or 0.13 per cent, to 5,665.4.
The fall came after the benchmark index traded up as much as 0.7 per cent in opening deals.
Sentiment started to turn in late morning trade as retail sales numbers fell short of analyst expectations and weak Chinese data rolled in.
“All the benefits from the positive US leads this morning were wiped out,” Gary Huxtable, client adviser at Atlantic Pacific Securities, said.
“Investors were confronted with poor retail sales figures and the second underwhelming Chinese PMI figure in as many days.”
The resources space underperformed amid weaker commodity prices, with IG chief market strategist Chris Weston noting reasons to be cautious on materials given a robust rally over the past six to 12 months.
“The combination of such extreme levels of port inventories (iron ore inventories at Chinese ports sit at a 10-year high), amid a falling pace of fixed asset investment growth in state-owned enterprises suggests prices may roll over and head lower now Lunar New Year is behind us,” he said.
“One to watch for those holding mining stocks too.”
A period of consolidation in the market could also count against the materials sector, according to Mr Huxtable.
“With our market very much within a tight range at the moment, it remains a stock pickers’ market, as we lack any major short-term catalyst to push the market in either direction,” he noted.
“The longer we continue to consolidate around current levels, the more incentive there is for investors to continue to lock in healthy profits within the material space.”
On Monday, BHP Billiton slid 0.8 per cent to $25.91, Fortescue ended flat at $.645 and Rio Tinto bucked the trend to edge up 0.6 per cent to $64.89.
Energy also undershot the broader market, with Santos off 0.8 per cent to $3.92 and Woodside down 0.5 per cent at $31.57.
In contrast, the big banks largely moved higher, aided by a strong showing from their US peers.
Action among the big four was headlined by a 0.8 per cent surge in NAB shares to $30.62, despite the company booking a 1 per cent dip in first-quarter earnings. Meanwhile CBA put on 0.3 per cent to $81.91 and Westpac won 0.5 per cent to $32.05. ANZ served as the laggard, retreating 0.3 per cent.
“Support for banks was a key feature of Friday’s rally in US markets. This was driven by President Trump’s order to investigate potential easing of bank regulation and changes to the Dodd Frank,” CMC Markets chief market analyst Ric Spooner said.
“However, while this initiative might help the overall sentiment for global banks, it is not directly relevant to Australian banks.”
Among other blue chips, Telstra lifted 0.8 per cent to $5.12, while Qantas rallied 0.9 per cent to $3.28.
In retail JB Hi-Fi and Wesfarmers each slipped 0.7 per cent, to $27.30 and $40.26 respectively, while Woolworths inched down 0.1 per cent to $25.36.
Meanwhile, the Australian dollar dipped US0.1c to US76.65 by the close of local trade as retail sales weighed.