RTTNews - The Australian stock market continued its southward march on Tuesday amid mixed cues from Wall Street, dragged by metal and oil stocks on lower commodity prices in the international market. The interest rate decision of the Reserve Bank of Australia had little impact on the market as traders had already discounted the outcome. Traders continue to exercise caution ahead of the earnings season in the U.S scheduled to kick-start officially on Wednesday.
In the U.S., stocks ended mixed on Monday following a late day rally, facilitated by bargain hunting at lower levels. Earlier, traders shrugged off a a report from the Institute for Supply Management showing that activity in the service sector contracted for the ninth consecutive month in June, although at a slower pace than economists had been expecting. The ISM said its index of activity in the service sector rose to 47.0 in June from 44.0 in May, but a reading below 50 indicates a contraction. Economists had been expecting the index to come in at 46.0.
The Nasdaq finished down by 9.12 points or 0.5% at 1,787, while the Dow closed up by 44.13 points or 0.5% at 8,325 and the S&P 500 rose by 2.30 points, or 0.3% to 899.
The All Ordinaries Index opened unchanged from its previous close at 3,784 and drifted into negative territory amid mixed cues from Wall Street and softness in commodity prices. The index continued to remain in the negative territory throughout the session before ending with a loss of 16.40 points, or 0.43%, at 3,768. The benchmark S&P/ASX 200 Index followed a similar trend and ended at 3,767, representing a loss of 16.80 points, or 0.40%.
On the economic front, the Reserve Bank of Australia said it is retaining its cash rate at 3% for the third straight month. In its assessment of the economy, the Central Bank said that economic conditions in the country were not as weak as expected earlier. However, the bank foresees further decline due to sluggish capacity utilization and output coupled with weak demand for labor. In a separate report, the Australian Industry Group revealed that construction sector contracted for the 16th straight month in June. The survey results revealed that the Australian Industry Group-Housing Industry Association's Performance of Construction Index (PCI) for June was 42.6, a decline of 4.3 points from the month before.
Light sweet crude oil price for August delivery ended at $64.25, representing a gain of $0.20 a barrel in Asian trading, after having shed about $2.63 a barrel in New York to $64.05 a barrel on concerns about weak demand.
Among metal stocks, BHP Billiton shed 1.13%, Rio Tinto fell 2.37% and Orica Energy edged down 0.14%. However, Fortescue Metals gained 2.06% and Macarthur Coal added 1.14%.
Oil stocks declined on lower crude prices. Woodside Petroleum edged down 0.93%, Santos lost 2.43% and Oil Search slipped 0.53%.
Gold stocks ended mixed. Lihir Gold slipped 0.70% and Newcrest Mining lost 2.02%. However, Sino Gold bucked the trend and soared 5.78%.
Financial stocks also ended lower on growth concerns. ANZ Bank lost 0.50%, Commonwealth Bank Australia edged down 0.16% and National Australia Bank slipped 0.73%. However, Westpac Banking bucked the trend and edged up 0.10%.
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