Australia Stocks Pulled Lower by Energy Firms
By Robb M. Stewart
MELBOURNE--Australian shares snapped a four-day run higher on
Monday, dragged lower by energy stocks after key oil producers
failed to reach an agreement to freeze production.
After gaining 4.5% over last week, the S&P/ASX 200 fell 20.4
points, or 0.4%, to finish at 5137.1. The basket of energy stocks
led the decline, falling 2.9%, while the materials subindex lost
0.9% and financials shed 0.7%.
Crude-oil prices tumbled more than 5% in late Asia trading after
a weekend meeting of oil producers in Doha, Qatar, ended without
reaching an agreement to cap output. Hopes for a deal among major
producers, including several from the Organization of the Petroleum
Exporting Countries and Russia, has helped fuel a rally that lifted
U.S. crude prices more than 50% from their February lows.
Woodside Petroleum Ltd. lost 1.4% for the day, while Oil Search
Ltd. and Santos Ltd. sank 4.3% and 7%, respectively. Smaller player
Beach Energy Ltd. dropped 7.3%.
Among mining shares, BHP Billiton Ltd. slid 3%, South32 Ltd.
lost 3.6% and Rio Tinto Ltd. was 1.6% weaker.
The major banks were all down for the day, led by a 1.5% drop
for Westpac Banking Corp. and a 1% loss for Commonwealth Bank of
"The potential for a Doha-led correction in commodity prices
brings focus back onto credit problems in the resource sector. The
possibility of a weaker Australian dollar might also weigh on
international investor sentiment toward Australian banks," Ric
Spooner, chief market analyst at CMC Markets, said.
Qantas Airways notched up one of the sharpest drops in the ASX
200 index, losing 11% after it said it had cut a planned expansion
of its domestic capacity due to the upcoming federal election and a
recent dip in local consumer confidence.
Shares in residential real-estate company McGrath Ltd. sank
almost 31% after it warned earnings for financial 2016 wouldn't
meet its earlier forecast thanks to weaker-than-expected volumes of
listings and sales, particularly in the north and northwestern
suburbs of Sydney.
For the day, 3.14 billion shares were traded worth 4.93 billion
Australian dollars (US$3.81 billion), Commonwealth Securities
Write to Robb M. Stewart at email@example.com
(END) Dow Jones Newswires
April 18, 2016 03:47 ET (07:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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