ASX ends financial year on low note
There was little sign of window dressing as the Australian sharemarket finished the fiscal year deep in the red after miners led losses and the Bank of International Settlements warned of a "puzzling disconnect" in financial markets.
The S&P/ASX 200 index lost 49.4 points, or 0.91 per cent, to 5395.7, the day's low as fund managers remained on the sidelines leaving the index up just 0.8 per cent for the year.
In its latest quarterly report the BIS, the central banks central bank, said it was "hard to avoid the sense of a puzzling disconnect" between the markets' buoyancy and underlying economic developments globally.
"Despite the euphoria in financial markets, investment remains weak," they said.
"Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions. And despite lacklustre long-term growth prospects, debt continues to rise. There is even talk of secular stagnation."
The Australian dollar was little changed at US94.20¢ and Government 10-year yields flat at 3.542 per cent as the 4.3 per cent decline in domestic new homes sales in May and 0.4 per cent increase in private sector credit undermined forecasts the housing sector would take up the growth slack from the mining slowdown.
"Personal credit remains soft as households opt to move spending broadly in line with incomes," Westpac economist Andrew Hanlan said.
The Shanghai composite index was up 0.7 per cent at the close of the ASX despite Chinese industrial profit growth slowing to 9.8 per cent from 10 per cent last month and revenue growth slowing to 8.1 per cent from 8.4 per cent.
In Tokyo the Nikkei index was up 0.3 per cent.
Dalian iron ore futures were down 2 per cent today following the 0.4 per cent drop in the spot price to US94.90 a tonne on Friday, while copper slipped 0.2 per cent to $US6940 a tonne and gold was flat at $US1316 an ounce.
More to come…
