Australian Market Declines, Led By Banks

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The FINANCIAL — The Australian stock market is lower on October 21, tracking the negative lead overnight from Wall Street and reflecting weakness in banking stocks. However, gains in resources stocks helped to partly offset the losses, according to Nasdaq.

In late-morning trades, the benchmark S&P/ASX200 Index is declining 12.60 points or 0.24 percent to 5,223.60, off a low of 5204.80 earlier. The broader All Ordinaries Index is down 10.30 points or 0.20 percent to 5,261.30.

The big banks are continuing to trade lower following news that the Australian government has accepted a majority of the recommendations of the Murray review into the financial system. ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac are lower in a range of 0.5 percent to more 1.3 percent.

Miners are higher. BHP Billiton (BHP) is advancing almost 1percent after the company reported a 7 percent increase in iron-ore production for the first quarter and also maintained its full-year production outlook. Rio Tinto (RIO) is adding 0.8 percent and Fortescue Metals is gaining more than 3 percent.

Gold miner Newcrest Mining is rising almost 2 percent and Kingsgate Consolidated is adding more than 1 percent after gold prices snapped a three-session losing streak and edged higher overnight.

Oil stocks are also mostly higher. Santos is gaining 2 percent and Woodside Petroleum is up 0.5 percent, while Oil Search is down 0.7 percent.

Crown Resorts said its revenue from main floor gaming operations in Australia rose 10 percent year-over-year for the period from July to mid-October, while non-gaming revenue rose 1 percent. Shares of the company are rising more than 2 percent.

Medibank Private’s chief executive George Savvides has brought forward his retirement plans and will leave the health insurer in March 2016. Shares of the company, which also reaffirmed its full year financial guidance, are down more than 1 percent.

In economic news, the Conference Board said that a leading economic index for Australia turned lower again in August, as its index dipped 0.4 percent for the month. That follows the 0.3 percent increase in July. The coincident index added 0.2 percent on month in August after adding 0.2 percent in July.

Westpac Bank said that a leading economic index for Australia turned barely higher again in September, as its index gained 0.1 percent for the month. That follows the 0.3 percent contraction in August. As a result, economists at Westpac suggest that the Australian economy will continue to grow below trend.

On Wall Street, stocks closed modestly lower amid choppy trades on October 20 as traders seemed uncertain about the near-term direction of the markets following recent volatility. Traders were also digesting a mixed batch of corporate earnings news.

The Dow edged down 13.43 points or 0.1 percent to 17.217.11, the Nasdaq slid 24.50 points or 0.5 percent to 4,880.97 and the S&P 500 dipped 2.89 points or 0.1 percent to 2,030.77.

The major European markets all moved to the downside on October 20. While the French CAC 40 Index fell by 0.6 percent, the German DAX Index and the U.K.’s FTSE 100 Index edged down by 0.2 percent and 0.1 percent, respectively.

Crude oil futures were flat on October 20, as traders braced for U.S. crude oil inventory reports. WTI crude oil for December delivery rose $0.01 to $46.29 a barrel on the New York Mercantile Exchange.


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