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Australia: Shares down ahead of central bank review, US election eyed

Tuesday, November 1, 2016 - 10:08

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[BENGALURU] Australian shares slipped on Tuesday, with financials underperforming as US election uncertainty and economic events kept investors on the defensive.

The market also awaited the Reserve Bank of Australia's policy review due later in the day where it is seen keeping its cash rate steady at a record-low of 1.5 per cent.

Sentiment was already fragile amid a US Federal Bureau of Investigation probe into democratic presidential candidate Hillary Clinton's use of a private email server.

The S&P/ASX 200 index fell 39 points or 0.73 per cent to 5,278.7 by 0112 GMT.

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Market voices on:

Manufacturing sector activity in China' - Australia's biggest export market - expanded at the fastest pace in more than two years in October, a survey showed. But that didn't appear to impact stock prices.

"Elections rarely have the ability to influence fundamentals materially. However Trump is such a wild card that an election win to him does have some potential to destabilise markets," said Angus Gluskie, managing director at White Funds Management.

But a win for Mrs Clinton's Republican rival Donald Trump is seen as unlikely despite the latest FBI-lined twist ahead of the Nov 8 election, Mr Gluskie said.

Apart from the RBA meeting, markets are also watching out for Bank of Japan policy review later in the day and the Federal Reserve meeting on Wednesday. US payrolls for October is also due on Friday.

The financial index lost ground in four of the last five sessions, shedding 0.6 per cent.

Australia's biggest general insurer, Insurance Australia Group dipped 1.1 per cent for a fifth trading session, to its lowest in a month, while the 'Big Four' banks fell 0.3 per cent to 0.8 per cent.

The energy index fell to its lowest in about a month after oil prices fell more than 3 per cent on Monday, over doubts about Opec's ability to implement its planned production cuts.

Heavyweights Woodside Petroleum and Oil Search gave up around 2.1 per cent.

Losses in the materials sector were led by iron giant BHP Billiton, which slipped 2 per cent to end two days of gains.

Crown Resorts also stumbled 1.6 per cent, after 18 of its staff members were arrested in China last week, for suspected "gambling crimes".

Airline company Qantas lost 3 per cent after it said on Monday that its half-year profit could fall nearly a sixth, helping shares of rival Virgin Australia rise 1.1 per cent.

New Zealand's benchmark S&P/NZX 50 index slipped 0.4 per cent or 28.9 points to 6,931.78, with consumer discretionary and health care stocks accounting for more than three-quarters of the losses.

Discount retailer Warehouse Group led losses, down 1.7 per cent, while Sky Network Television extended previous session declines and fell 1.5 per cent.

REUTERS

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