The Australian sharemarket has stayed in red territory at lunchtime on Monday, dragged down by consumer stocks and miners, kicking off a week that is likely to be dominated by the outlook for Australian interest rates.
The S&P/ASX 200 was down 60.4 points, or 0.7 per cent, to 8,149.1 at 12:15pm AEST, with Coles and Woolworths falling by nearly 3 per cent after the competition watchdog launched legal action against the supermarket giants, alleging they misled customers through their discounts.
Wall Street was mixed on Friday.Credit: AP
The weakest sector on the local bourse was consumer staples, down 2.5 per cent, while consumer discretionary stocks fell 1.4 per cent.
The biggest decliners among the large-caps was Coles, with losses of 3.4 per cent, followed by Harvey Norman (down 2.9 per cent) and Woolworths (down 2.9 per cent).
Mining giant BHP was down 1.3 per cent at lunchtime and Rio Tinto fell 0.3 per cent, while the largest company on the ASX, Commonwealth Bank, slid 1.2 per cent. The decline comes after the local market hit record highs last week, fuelled by the US Federal Reserve’s 0.5 percentage point cut in interest rates.
Meanwhile, dairy processor Beston Global Food Company has suspended trading after announcing it had appointed KPMG as voluntary administrators, who are seeking buyers of expressions of interest to recapitalise the business.
“There are significant dairy processing assets across two sites, strong relationships with loyal dairy farmers throughout South Australia and into western Victoria and established distribution channels both domestically and globally,” said restructuring partner Tim Mableson.
Meanwhile, Boss Energy was at the top of the bourse with gains of 7.5 per cent, followed by Paladin Energy (up 6.5 per cent) and Healius (up 3.4 per cent).
Rates will remain a focal point for investors this week, as the Reserve Bank of Australia will on Tuesday announce its decision on the cash rate. While markets do not expect a change, a growing number of central banks overseas have started cutting rates, and the RBA’s language will be pored over for any clues about its thinking.