Australia Market gains 0.3% as financials rise; health care drags

Headline indices of the Australia market closed higher on Monday, 17 September 2018, as investors continued hunting for beaten down stocks, with shares of banks and financials being notable gainers. However, market gains were capped by losses in healthcare stocks after Australian Prime Minister Scott Morrison announced a royal commission into the sector due to an "alarming and disturbing" spike in elder abuse and poor standards in the industry. The benchmark S&P/ASX200 index closed 19.67 points, or 0.32%, higher at 6,185 points, while the broader All Ordinaries index was up 17.55 points, or 0.28%, at 6,293.90 points.

Shares of banks and financials closed higher after early losses, with NAB posting the biggest gain, jumping 0.8% to A$27.56 after it announced former NSW Premier Mike Baird would be leading its retail unit following the departure of consumer boss Andrew Hagger. Commonwealth Bank shares were up 0.4% at A$71.75 and ANZ was up 0.9% to A$28.40.

 

Shares in aged-care operators plunged after the government said it would set up a powerful public inquiry to investigate abuse and mistreatment in the sector. Australia's A$20 billion ($14.3 billion) aged-care industry has long attracted headlines of predatory pricing, assaults on patients and poor standards of care, and investors are bracing for more bad news after the government's announcement on Sunday. Estia Health was the hardest hit, plummeting 18.6% to A$2.40. Regis Healthcare were down 17.1% to A$3.00, Japara Healthcare down 17% to A$1.39, and Aveo Group down 7.2% to A$2.06.

Oil stocks were also mostly lower despite crude oil prices rising Friday. Oil Search is lower by 0.2% and Woodside Petroleum is down 0.4%, while Santos is advancing more than 1%.

CURRENCY: Australian Dollar declined against greenback and other major currencies on Monday, impacted by the escalation of trade tensions between the US and China. The Aussie was buying 71.60 US cents, down from 72.06 US cents on Friday; 61.55 euro cents, from 61.56; 54.71 British pence, from 54.94; 109.18 NZ cents, from 109.41.

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