Australia Markets closed

ASX dips again as CIMIC, BHP weigh

Michael Mehr
The futures market is pointing to a fall in the ASX at the start of trade

The Australian share market has fallen for the fourth time in five days, with losses from construction giant CIMIC Group and mining titan BHP dragging the market.

The benchmark S&P/ASX200 index closed down 24.2 points, or 0.36 per cent, to 6,649.1 points on Thursday, while the broader All Ordinaries was down 28.6 points, or 0.42 per cent, to 6,735.4.

"The market's not looking so good," said Bell Direct equities analyst Julia Lee, adding that a 10 per cent drop in Netflix stock after it missed subscriber numbers led to a sell-off in Nasdaq futures, rattling tech markets around the world.

CIMIC Group alone accounted for more than nine points of the 24-point drop, after shares in Australia's biggest construction company slid 19 per cent to a more than two-year low of $37.09.

CIMIC announced its profit was up one per cent in the first half to $367 million but missed expectations, leading UBS to cut its price target on the company from $50 to $46.

Ms Lee called the earnings results "pretty poor" and said she was guessing that the Australian reporting season would be "pretty harsh" when it kicks off in two weeks.

Energy stocks also took a tumble, down 2.3 per cent after the price of oil dropped one per cent overnight as dovish US senator Rand Paul angled to reduce tensions with Iran.

Santos was down 1.7 per cent to $6.92, Oil Search down 4.5 per cent to $6.65 and Woodside Petroleum dropped 2.7 per cent to $34 after announcing its revenues fell 32 per cent in the June quarter.

The mining sector was down 0.4 per cent as a whole, with BHP dropping 1.5 per cent to $41.12, Fortescue falling 1.7 per cent to $8.65 and Rio Tinto down 0.8 per cent to $102.36.

Lendlease was up 4.75 per cent to $14.77 after the property group announced a $20 billion deal with Google to develop the tech giant's landholdings in the San Francisco Bay Area into mixed-use communities with 15,000 new homes.

The big banks were mixed, with Commonwealth up 0.1 per cent to $81.38 but Westpac fell 0.4 per cent to $27.58, ANZ was down 0.3 per cent to $27.12 and NAB was down 0.1 per cent to $26.92.

Telecom shares were the biggest gainers, up 0.3 per cent, while property shares gained 0.04 per cent.

Ms Lee said that weaker-than-expected jobs figures showing that Australian unemployment had held steady in June at 5.2 per cent had boosted the chances of a third interest rate cut this year by the Reserve Bank.

Lower interest rates would make "bond proxy" assets such as telecommunications and property shares more attractive, Ms Lee explained.

The jobs data also prompted a rise in the Aussie dollar against its US counterpart.

At 1653 AEST the Aussie dollar was buying 70.33 US cents, from 70.06 US cents on Wednesday.

ON THE ASX:

* The benchmark S&P/ASX200 index was down 24.2 points, or 0.36 per cent, to 6,649.1 points at 1630 AEST on Thursday.

* The All Ordinaries was down 28.6 points, or 0.42 per cent, to 6,735.4.

* At 1630 AEST, the SPI200 futures index was flat at 6,578.

CURRENCY SNAPSHOT AT 1630 AEST:

One Australian dollar buys:

* 70.33 US cents, from 70.06 US cents on Wednesday

* 75.76 Japanese yen, from 76.06 yen

* 62.60 euro cents, from 62.55 cents

* 56.55 British pence, from 56.57 pence

* 104.40 NZ cents, from 104.47 cents.