Investors await growth data; consumer and energy sectors drag Australian share prices lower

The Australian share market ended Tuesday with a lower closing price, due to thin trading. This was mainly caused by the consumer and energy sector, where heavyweight constituents were traded ex-dividend. Local traders also remained on the sidelines, waiting for economic growth figures that are expected later this week.

The S&P/ASX 200 index fell 0.3% to 8,900.6, its third consecutive session in red. The 0.5% drop on Monday followed a strong August.

Woolworths, the supermarket chain, fell 3.1%. Consumer stocks dropped 1.7%. Wesfarmers, a conglomerate, also fell 2.9% and was among the worst performers in the sub-index of consumer discretionary, which dropped nearly 2%.

Both stocks were trading ex-dividend.

Oil and gas giant Santos fell 1.4% after it went ex-dividend.

After biotech company CSL dropped nearly 1%, healthcare stocks fell 0.8% to their lowest level since June 2019.

CSL, a major company in the country, has fallen over 23% from August 19 to today, putting a heavy burden on the benchmark for healthcare and the sub-index. This is after the announcement that it would spin off its division of influenza vaccines and layoff up to 15% employees.

Tony Sycamore is a market analyst with IG. He said that investors continue to abandon the ASX200 Healthcare sector since August, and they are now looking for refuge in the financial sector.

Three of the four 'Big Four banks' saw their financials rise between 0.8% to 1%. This helped arrest some losses.

The markets are now awaiting the release of the second quarter gross domestic product (GDP) data by the Reserve Bank of Australia (RBA), which is expected to be released on Wednesday, in order to gauge its stance on monetary policy.

Sycamore said that a GDP in line "will support the argument for further easing... as it will reaffirm the idea that Australia's economy is growing significantly below its 2.5%-3% potential growth rate".

The market swaps currently price over 80% of the probability that RBA will keep rates unchanged later this month.

Gold stocks and miners both rose 0.4% on higher commodity prices.

The benchmark S&P/NZX 50 Index rose 0.5% in New Zealand to 13,133.16, marking its fourth consecutive session with gains. (Reporting by Kumar Tanishk in Bengaluru; Editing by Janane Venkatraman)

(source: Reuters)