ASX snaps seven day winning streak
The Australian sharemarket broke a seven-day winning streak after a major bank announced its half yearly result and the price of oil slumped on a new deal.
The benchmark ASX 200 index slumped by 82.20 points or 0.92 per cent to 8,157.80 during Monday's trading.
The broader All Ordinaries also fell by 82.20 points or 0.97 per cent to close Monday at 8,373.00.
The Aussie dollar is trading around US64.40 cents.
A worse-than-expected half yearly result by Westpac led to a fall in the financial sector. For the six months ending March 31 Westpac announced a 3 per cent decline in net interest income to $9,351m.
It also said the bank's core net interest margin, a key metric of profitability, fell by 3 basis points on tighter loan spreads, due to more competition in lending and tighter deposit spreads.
Westpac shares slumped 2.99 per cent to $32.45 on the result, which also dragged ANZ down 0.99 per cent to $30.06, NAB dropped 1.75 per cent to $35.85 and bourse heavyweight CBA dropped 1.61 per cent to $166.93.
Capital.com senior financial market analyst Kyle Rodda said financials dragged after the Westpac result.
'The numbers from the bank weren't terrible,' he said.
'However, given the rich valuations of some of the Big 4 – almost comically rich when it comes to the CBA – a dose of reality helped sober up investors, lower bank stocks and weaken the overall ASX200.'
On an overall negative day for the market, eight of the 11 sectors finished in the red.
Monday's falls were led by the energy sector which closed down 2.9 per cent lower after OPEC+ announced a deal which will see supply of oil rise at the same time demand for crude is slowing.
According to the oil producers, countries including Saudi Arabia and Russia said after a meeting on Sunday (AEST) to raise output by 411,000 barrels per day from June, in a move designed to punish overproducing nations.
The price of Brent futures dropped $US2.04 a barrel to $US59.25.
Woodside shed 3.6 per cent to $19.87 while Santos shed 4 per cent to $5.84 following the announcement.
Mr Rodda said unfortunately for investors, the drop breaks a seven day winning streak.
'Energy weighed on the markets off the back of a nose dive in oil prices this morning, with the Saudis seemingly taking their hand off the wheel to punish other OPEC members for noncompliance with output quotas,' he said.
'There's also the possibility they are allowing prices to fall to butter up the Americans before critical nuclear and arms talks.'
In other corporate news Endeavour Group announced flat to modest retail sales growth for April following improved trading over the Easter holiday period. The business said it had strong sales momentum in its hotel sector across food, bars, gaming and accommodation.
It was also a good day for Gold Road shareholders, soaring 9.43 per cent to $3.25 after announcing a takeover bid.
The company previously entered an intraday trading halt on Friday, before announcing the agreement with ruyere Holding which will acquire 100 per cent of the issued and outstanding shares capital in Gold Road.
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