Shares end 0.21pc lower, iron ore surges

·4-min read

Many investors enjoyed a holiday and Australia's share market eased too, while the surging price of iron ore has analysts wondering about the implications for the Aussie dollar.

The benchmark S&P/ASX200 index closed lower by 15.1 points, or 0.21 per cent, to 7045.6 on Monday.

The index remains in range of its record high, 7197.2.

The All Ordinaries closed lower by 12.9 points, or 0.18 per cent, to 7307.8 points.

The indices moved little during trade as most Australians had the day off work due to the Anzac Day public holiday.

Shares in utilities and consumer staples had the biggest falls and dropped almost one per cent.

Coles and Woolworths are due to give third quarter sales reports this week, which could show less panic-buying as Australia better controlled the coronavirus.

Coles dropped 0.45 per cent to $15.64, while Woolworths shed 0.85 per cent to $41.88.

Materials shares had the only gains of note, up 0.36 per cent.

Mining giant Fortescue jumped 4.8 per cent to $22.70 as the iron ore price rose to $185 per tonne.

Fortescue is the ASX's biggest trader in the steel-making component. The iron ore price has climbed steadily since last year, as Chinese manufacturers regather from the coronavirus impact and increase production.

BHP gained 0.59 per cent to $47.84. Rio Tinto was better by 1.12 per cent to $122.51.

The Aussie dollar climbed within the US 77 cents range, but not as much as some expected.

Westpac senior currency strategist Sean Callow said the Aussie dollar had been flat despite the US dollar falling against major currencies.

He said the Aussie's underperformance seemed at odds with iron ore prices being at 10-year highs.

Mr Callow said the iron ore price was much higher than federal government estimates in the mid-year budget review.

He said there would be plenty of discussion over what this meant for fiscal policy in the May 11 federal budget.

Meanwhile, there was relief in Perth and the neighbouring Peel region as the McGowan government decided not to extend the three-day coronavirus lockdown, due to end tonight.

The lockdown was prompted by two infections traced to people who stayed at a quarantine hotel in Perth.

Damage remained for travel companies, however. Corporate Travel Management shed 3.3 per cent to $19.62. Qantas lost 1.2 per cent to $4.93.

Overseas, earnings from giants such as Apple and Google-parent Alphabet will attract plenty of attention this week.

Investors will be keeping a close eye on the US Federal Reserve's monetary policy meeting.

On the ASX, health insurer NIB jumped 10.2 per cent to $5.94 after investors liked its full-year guidance.

NIB said the number of Australian health insurance customers was up 3.7 per cent on the start of the financial year. There were fewer claims than expected.

The strong Aussie business helped more than offset coronavirus-related declines for travel-related insurance, NIB said.

Underlying operating profit was expected to rise from $86.9 million in the first-half to a full-year range of between $200 million and $225 million.

Westpac said first-half earnings due next week will be lower by $282 million, mostly due to compensating customers.

The bank has put $220 million aside for customer refunds and legal expenses, along with write-downs of software ($115 million) and costs.

Some of the refunds relate to financial planners charging fees for no service.

Shares were down 0.16 per cent to $25.08.

NAB was best of the big four banks and rose 0.76 per cent to $26.66.

The Australian dollar was buying 77.78 US cents at 1719 AEST, higher from 77.28 US cents at Friday's close.


* The benchmark S&P/ASX200 index closed lower by 15.1 points, or 0.21 per cent, to 7045.6 on Monday.

* The All Ordinaries closed lower by 12.9 points, or 0.18 per cent, to 7307.8 points.

* At 1719 AEST, the SPI200 futures index was down by four points, or 0.06 per cent, to 7016.


One Australian dollar buys:

* 77.78 US cents, from 77.28 cents on Friday

* 83.80 Japanese yen, from 83.53 yen

* 64.28 Euro cents, from 64.22 cents

* 55.85 British pence, from 55.73 pence

* 107.83 NZ cents, from 107.72 cents.