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Australia: Shares slide, Wesfarmers hit by disappointing Q1 sales

Wednesday, October 26, 2016 - 10:48

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[BENGALURU] Australian shares tumbled on Wednesday as losses on Wall Street were compounded by retail giant Wesfarmers Ltd slipping on disappointing quarterly sales.

The S&P/ASX 200 index stumbled 1.5 per cent or 81.83 points to 5,360.4 by 0204 GMT. The index fell as much as 1.6 per cent in morning deals to its lowest in a month.

"There are several company-specific negative stories," said Chris Conway, Head of Research at Australian Stock Report, adding that Wall Street's weak performance further dented sentiment.

Shares in Wesfarmers slipped 5 per cent after the company's first quarter sales undershot market expectations. Same-store food and liquor sales at its Coles supermarket chain rose 1.8 per cent in the three months ending September, down on growth of 3.3 per cent in the June quarter.

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Oil majors were also hit hard after an overnight drop in oil prices, with Woodside Petroleum falling 2.2 per cent, and Oil Search off 2.9 per cent.

The financial index dipped 1.5 per cent, with all four "Big Banks" down 1.2 per cent to 1.5 per cent, as investors braced for National Australia Bank's earnings due Thursday.

The morning spotlight was on entertainment company Ardent Leisure, which plummeted 22 per cent after confirming four fatalities at its theme park in Queensland on Tuesday.

The decline set the stock on course for its worst day in more than 1-1/2 years.

Telstra inched lower 0.8 per cent, while Qantas Airways lost 2.8 per cent, tracking broader market movement.

Moving in the positive direction, iron miners Fortescue Metals and Rio Tinto rose 2 per cent and one per cent receptively, cheered by a rally in both iron and copper.

Chinese iron ore futures surged 6 per cent to their highest in more than two years on Tuesday, while copper prices rose to their highest in more than a week.

Gold major Newcrest Mining rose as much as 1.3 per cent in early trade, before pulling back 0.2 per cent by midday.

New Zealand's benchmark S&P/NZX 50 index slipped 1.1 per cent or 78.71 points to 6,924.16, led by industrial stocks.

Auckland International Airport, among the biggest losers on the benchmark fell 3 per cent after announcing a retail bond offer, while Sky Network Television shed about 2 per cent.

REUTERS

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