ASX 200 Records Friday Loss with Banks and Miners Providing the Drag

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A weak session on Wall Street as the Dow Jones closed at its lowest level in over a month and the Nasdaq and S&P also showed losses provided a precursor for the S&P/ASX 200 to move downwards today. With European indices also largely down on Thursday and commodities prices weakening, it was always going to be tough for the ASX to do better than the 0.66% drop finally sustained. There was, however, so relatively positive news out of China with Q4 GDP growth for 2016 coming in at 6.8% when 6.7% had been forecast. Annual GDP growth did dip to 6.7% from 6.9% the previous year but was within the government’s 6.5%-7% target and met expectations.

The banking and mining sectors provided a drag today. All four major banks on the ASX 200 suffered losses today with ANZ down 1.64%, Westpac 1.48%, the Commonwealth Bank of Australia 1.32% and National Australia Bank 0.85%.

The big miners suffered a similar fate with Rio Tinto’s share price falling by 1.89%, BHP Billiton by 1.27%, and Fortescue Metals recording a 1.6% loss. Metals and coal miner South32 saw a loss of 4.3%. Metals recycler Sims Metals Management shed 5.7%.

BHP Billiton announced a preliminary agreement with Brazil’s federal prosecutor over settlement for the Samarco dam disaster. The mine was a joint venture with Brazilian iron ore and nickel giant Vale. The civil claim lodged against the companies was for $47.5 billion. The settlement involves an immediate payment of $680 million to support social and environmental remediation programs in the area affected with billions of dollars in compensation claims to be additionally settled by the end of June.

One big success story on Friday was the 12.3% gain seen by Shaver Shop Group, which posted a positive sales update. December corporate store sales came in at the upper end of the company’s recently revised up forward guidance range of $26 to $28 million, with $27.8 million the final figure booked.

On the flip side, fashion retailer OrotonGroup, best known for its leather handbags, fell by 13.7% after downgrading its profit guidance. A 10% decrease in like-for-like sales is now expected for the first half of 2017, compared to a 10% increase last year.

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