The Australian share market fell 2.2% this week, adding to last week’s 4% decline, with almost all sectors experiencing losses.
The benchmark S&P/ASX 200 index dropped 118.3 points over the five days to end the week at 5,356.5, with energy and mining among the worst performing sectors.
Energy stocks slumped 4.2% this week after tumbling 7% last week, as crude oil futures in the US slipped to a six-year low. Mining companies lost 2.5%.
“Big falls in the oil price due to oversupply has been a driver,” said CommSec market analyst Steven Daghlian.
At around 4pm AEST, WTI crude oil traded on the New York Mercantile Exchange at US$42.05 a barrel, the lowest level since 2009.
Meanwhile, China’s surprise move to devalue its yuan currency “created jitters across the market and in particular currencies”, said Daghlian, adding that investors’ concerns pushed the Australian dollar to as low as 72.16 US cents on Wednesday.
The Australian dollar had rebounded to 73.39 US cents at around 4:30pm AEST today.
Australian companies delivered mixed results during the second week of the earnings reporting season.
“From a macro perspective, China devaluing their currency has had a negative effect, and on the micro side the earnings season impacts companies’ share prices depending on their results,” said CommSec senior investment adviser Blair Hannon.
He said market responses to earnings season have been mixed.
Commonwealth Bank reported a 5% increase in cash net profit after tax (NPAT) to $9.14bn for the financial year ended 30 June 2015. The nation’s largest lender also became the final of the big four banks to say it will raise additional capital to meet regulatory requirements.
Bendigo and Adelaide Bank’s full year underlying cash earnings grew 13% from a year ago to $432.4m, while National Australia Bank said its third quarter cash profitrose 9% to approximately $1.75bn.
Biotechnology company CSL’s full year NPAT increased 6% to US$1.4bn, and expects strong underlying demand for its product to continue next year. Despite this, its shares dropped 3.9% over the week.
Cochlear slid 5.6% – despite reporting full year earnings growth – as the company lowered its final dividend by 21%.
Ansell gained 4.6% after posting a 20% rise in annual profit to US$188m.
Telstra and consumer stocks
Telecommunications provider Telstra (ASX: TLS) reported NPAT of $4.3bn for the 2015 financial year, and will pay shareholders a final dividend of 15.5 cents per share.
In the consumer sector, Fairfax Media announced a 63% slump in full year NPAT to $83.2m, while online classifieds group Carsales.com posted an 8% rise in annual net profit.
Domino’s Pizza lifted its full year dividend by 41% to 51.8 cents per share after delivering a 40% increase in full year NPAT to $64m.
Meanwhile, digital real estate company REA Group reported a 24% rise in NPAT to $185.4m.