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Soft Chinese data weighs on Aust shares

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Published on: Monday, May 15, 2017

The share market has closed steady after softer-than-expected Chinese figures weighed on the major miners and gains from the banks eased.

The benchmark S&P/ASX200 closed 0.03 per cent higher on Monday, creeping back for a late recovery after an afternoon slump.

The share market was trading modestly higher before the release of softer-than-expected Chinese factory output and retail sales data for April and weak fixed-asset investment figures around midday.

OptionsXpress market analyst Ben Le Brun, said the weak data added to concerns that Australia’s biggest trading partner’s economic growth has begun to taper off.

“There are tighter monetary conditions in China and that seems to be reflected in the data,” Mr Le Brun said.

“While the market was expecting growth to ease, it was softer than expected and there has been a knee-jerk reaction, affecting the miners mainly.”

On the ASX, mining giant Rio Tinto fell 0.60 per cent to $59.44, Fortescue Metals slipped 0.63 per cent to $4.71 and BHP bucked the trend to rise 0.29 per cent to $23.82.

The big four banks have recovered from last week’s falls, driven by the federal government’s plan to impose a $6.2 billion tax on them.

However, their gains had eased by the close, ranging from a 0.7 per cent rise for Commonwealth Bank to a 0.96 per cent lift for National Australia Bank.

The worst-performing sector was consumer staples, with Woolworths down 0.6 per cent to $26.79 and Wesfarmers down 0.93 per cent to $43.57.

Other retailers were also weaker with JB Hi-Fi , Harvey Norman and Myer posting falls of 0.92 per cent, 1.25 per cent, and 3.17 per cent, respectively.

Oroton shares are in a trading halt after the struggling luxury handbag retailer warned its earnings slipped in April and it would be issuing an update before Wednesday. It last traded at $1.35.

Mr Le Brun said last week’s weak Australian retail spending figures, soft third-quarter sales reports from a number of retailers and ongoing stiff competition, particularly among the supermarkets, were turning investors away from the retailers.

Elsewhere in the market, Fairfax Media surged seven cents, or 6.5 per cent, to $1.14 – a six-year high – after the media company received a revised and higher $2.76 billion takeover bid from a consortium led by US private equity giant TPG Capital.

Agribusiness Elders lifted six cents, or 1.36 per cent, to $4.46 after it booked a 56 per cent jump in first-half net profit to $38.2 million.

Meanwhile, the Australian dollar is firmer against the greenback which has lost some ground following the release of weaker-than-expected US retail spending data.

The local currency did fall slightly after the release of the Chinese data but has since recovered.

At 1700 AEST, the Aussie was trading at 74.24 US cents, up from 73.77 US cents on Friday.

ON THE ASX:

* At the close, the benchmark S&P/ASX200 up 1.5 points, or 0.03 per cent, at 5,838.4 points

* The broader All Ordinaries index was down 2.5 points, or 0.04 per cent, at 5,868.4 points.

* The June SPI200 futures contract was up 15 points, or 0.26 per cent, at 5,826 points.

* National turnover was 2.03 billion securities traded worth $5.7 billion.

CURRENCY SNAPSHOT AT 1700 AEST:

One Australian dollar buys:

* 74.24 US cents, from 73.77 on Friday

* 84.35 Japanese yen, from 83.93 yen

* 67.88 euro cents, from 67.93 euro cents

* 57.46 British pence, from 57.30 pence

* 107.75 New Zealand cents, from 107.91 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,231.50 per fine ounce, up $US3.90 from $US1,227.60 on Friday

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020 at 1.7747pct, from 1.803pct on Friday.

* CGS 4.75 per cent April 2027 at 2.5857pct, from 2.6279pct.

Sydney Futures Exchange prices:

* June 2017 10-year bond futures contract at 97.380 (implying a yield of 2.620pct), from 97.33 (implying a yield of 2.67pct) from Friday

* June 2017 3-year bond futures contract at 98.180 (1.890pct), from 98.140 (1.860pct)


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