Australia Market falls 0.2%

The Australian share market closed slight lower on Monday, 13 May 2019, as disappointing earnings from the country's biggest bank Commonwealth Bank of Australia weighed on financials, although losses were offset by gains in healthcare and gold stocks. At closing bell, the benchmark S&P/ASX200 index fell 13.26 points, or 0.21%, at 6,297.59 points, while the broader All Ordinaries dropped 11.83 points, or 0.19%, at 6,381.30.

Risk sentiments remain subdued amid fears of an escalating and destructive trade war after talks in Washington last week between the administration and a Chinese delegation ended without a resolution and the US followed through with its threat to increase the tariffs on US$200 billion of China's exports.

 

Financial stocks closed steep down, with Commonwealth Bank of Australia leading losses, down 2.5%, after announcing its third-quarter cash profit and announcement of a further A$714 million in provisions to compensate customers for being overcharged or wrongly billed for services not provided. Australia and New Zealand Banking Group fell 3.9% while Macquarie Group shed 3.6%, as shares of both banks traded ex-dividend.

Shares of Lendlease added 8.7% to A$13.85, on rumor of a takeover by Japanese giant Mitsui, but Lendlease has denied this and Mitsui said it is not engaged in any deliberations in regard to a takeover of Lendlease.

Shares in Adelaide Brighton fell to four-year lows of A$3.57 after the company warned that its profits for 2019 could be upto 15% lower than the previous year, citing weaker demand in residential construction and fierce competition as reasons for the forecast downgrade.

Shares of Reliance Worldwide (RWC) tumbled 15.4% as the plumbing supply firm revises its FY19 earnings (EBITDA) guidance to a range between A$260 million and A$270 million, lower by A$20 million than its previous guidance.

ECONOMIC NEWS: The housing finance figures for March has fallen by 2.8% for the month compare to estimates of a 0.5% decline. Investment home loan values fell by 2.7% while owner-occupied loans fell by 3.4% as the national housing market continues to cool.

CURRENCY NEWS: The Australian dollar declined against the U.S. dollar on Monday, hit by the US-China trade worries. The Australian dollar was quoted at 69.86 US cents, having been as high as 70.08 US cents during late US trade.

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