The Australian sharemarket lost ground for the third day despite a strong performance from US shares overnight. The All Ordinaries Index (XAO) fell by 0.4 per cent; however is still only 2 per cent away from revisiting the six-year highs reached late last week.
The Reserve Bank pulled no surprise punches, keeping its tone and interest rates steady at 2.5 per cent for the 13th month. Interest rates are likely to remain on hold for the next few months at least. The RBA said it expects growth to be a little below trend while it didn't express concern with higher inflation. The central bank thinks it will be some time before unemployment falls consistently. On Thursday, the latest reading on Australian employment will be released. Over 90,000 jobs have been created so far this year, while the 6 per cent jobless rate is still around 2 per cent higher than pre-GFC levels.
While most sectors lost ground today, the healthcare industry was a standout thanks to Cochlear (COH) which rose by 10.5 per cent. The world's biggest maker of hearing implants posted a 29 per cent slump in annual profit; however reported improved sales as new products were released to market. Its $93.7m profit was held back partly by US regulators dragging their feet with new product approvals. COH announced a $1.27 per share final dividend, payable to eligible investors on 25 September.
Toll road operator Transurban (TCL) fell by 0.9 per despite announcing a 44 per cent lift in annual profit to $252.2m. A 13 per cent rise in revenue from its toll roads due to increased traffic together with lower costs helped.
Crown Resorts (CWN) slumped by 3.9 per cent, taking its losses this calendar year to 9.8 per cent. The James Packer controlled gaming company announced its plans to build a new casino in Las Vegas, with the purchase of a piece of land at a discounted price. Investors sold its shares, potentially due to concerns the casino operator is overstretching itself with too many developments in the works.
The major banks fell by as much as 0.6 per cent while firmer commodity prices couldn't help the miners, with Fortescue Metals (FMG) down 0.8 per cent, BHP Billiton (BHP) down 0.7 per cent and gold miner Newcrest Mining (NCM) dropped 1.5 per cent.
At the close, 2.2 billion shares were traded worth $5 billion. 425 stocks improved, 553 lost ground and 343 stocks ended unchanged.
Looking ahead, an update on retail spending in Europe will be released tonight. In the US a report on factory orders will be issued while Motorola and Time Inc. are scheduled to issue profit results.
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