Australian market falls on political turmoil

The Australian market fell for a third successive day with the ASX 200 slipping 21 points or 0.3 per cent to 6244.4 as the uncertainty continued in Canberra with Prime Minister Malcolm Turnbull stalling another spill motion until Friday, provided his critics could produce a letter with 43 signatures on it, and with the House of Representatives adjourning.

The leadership vote on Friday would be the second in a week.

Just this week, the market has lost 1.7 per cent, or $30 billion.

The Australian dollar traded more than 0.8 percent lower against the US dollar during the day.

Parliament was adjourned early on Thursday to deal with a string of ministerial resignations and allow for a party meeting. Malcolm Turnbull described the leadership crisis as an “internal insurgency” to move the party to the far right.

“We are seeing elevated sovereign risk in our country, I think it looks like the Prime Minister is going to get knocked off any minute now, so there is definitely sovereign risk here compared with emerging markets,” Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities told Reuters.

The financial sector, which faces an uncertain future with a change in government, dragged down the market, losing 1.2 per cent. The country’s largest lender Commonwealth Bank of Australia was down 1.6 per cent, and ANZ fell 2.4 per cent.

Despite its underlying profits rising 14 per cent to $1.6 billion, Qantas shares fell 2.8 per cent after it warned that rising fuel costs would be the big challenge for the group in 2019.

And despite reporting a 13.9 per cent profit growth of $262.93 million, Flight Centre shares fell 7.7 per cent to $61.98 in the wake of reports alleging the company ripping off customers, underpaying staff and harassing employees

On the plus side, mining stocks lifted with BHP and peer Rio Tinto Ltd lifting 1.3 per cent and 0.4 per cent higher respectively and South 32 up 4.91 per cent.

Santos shares lifted 11 per cent to $6.96 after the company announced a return to divided payments and solid profit for the first half of the year of $US217 million.

 



An award winning author and journalist, commentator, lecturer, and speaker, Leon is a freelance business journalist who covers a range of areas including politics, strategy, globalization, leadership and all the big trends ahead. His main skill is summing up all the news that’s around. For the last 30 years, his main focus has been on management issues. He also produces two podcasts for RMIT University, Talking Business and Talking Technology. Leon has worked for Fairfax, News Limited, AAP and the Herald and Weekly Times.


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