Australian shares fell for a second day as a swag of stocks traded ex-dividend and economic data came in mixed.
At lunchtime the ASX 200 was 36 points or 0.7% weaker at 5050 with BHP the biggest drag on the market after the miner paid out a 55c dividend. The metals and mining sector led the decline, sliding 2.3%, followed by materials -2.2%, industrials -1.6% and IT -0.9%. The morning's only gains came in traditional defensive sectors, including utilities +0.6%, property trusts +0.4% and telecoms +0.1%.
"There's a lot of risk coming off with commodities prices in London coming off, sending the commodities space down," IG Markets market strategist Evan Lucas told Fairfax. "I feel we're about to move sideways and take a breather rather than upward, as has been the trend in the last three months."
A busy morning of economic data included subdued inflation, mixed building approvals, strong job ads and weak company profits. Job advertising, a useful yardstick for employment conditions, improved for a second month in February following an upwards revision to January's figures. The ANZ survey showed ads increased a seasonally-adjusted 3% last month, following a 0.6% hike in January. cent drop.
January building approvals were weaker than anticipated, dipping 2.4% versus expectations for a rise of 2.8%. Company operating profits declined 1% last quarter, less than economists predicted. Consumer prices were unchanged last month, leaving the annual inflation rate well below the Reserve Bank's danger level at 2.4%.
Asian markets were mixed. Shanghai slumped 2.04%, Hong Kong's Hang Seng lost 0.59% and Japan's Nikkei added 0.41%. Dow futures were recently down 22 points or less than 0.2%.
Crude oil futures dropped 38 cents this morning to US$90.64 a barrel. Spot gold bounced higher following a three-session losing run, recently up $7.10 at US$1,583 an ounce. The dollar was buying $US1.0172.
Not as bad a morning as the index implies, with BHP's dividend accounting for a chunk of that decline and plenty of others, including ASX, AMP, TOL, LLC, QBE and ARI, also trading ex-dividend. A weak open in Shanghai added to the pressure. Gloomy US futures are not helping after the weekend brought no sequestration relief. Meanwhile, my morning was all promise and no fulfillment. Picked lows in WCL and QFX and hope for some bounce this arvo. Took ARI a pip or so early and now find it becalmed around my buy price. All a bit ho-hum.
