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Australian stock market drifts lower

Australian stock market drifts lower

CANBERRA: The Australian stock market slipped into negative territory after opening higher on Tuesday following the modest gains overnight on Wall Street. Gains by mining stocks were more than offset by weakness in banking and oil stocks. In late-morning trades, the benchmark S&P/ASX 200 Index is losing 45.70 points or 0.79 percent to 5,727.90, after rising to a high of 5,792.00 earlier. The broader All Ordinaries Index is down 43.30 points or 0.74 percent to 5,781.20. In the banking sector, ANZ Banking, National Australia Bank and Westpac are declining in a range of 0.2 percent to 0.8 percent.

Commonwealth Bank said that short-term incentives for its CEO Ian Narev and his group executives will be cut to zero, amid allegations that the bank breached anti-money laundering and counter-terrorism financing laws. The bank’s shares are losing almost 1 percent. Among oil stocks, Woodside Petroleum and Oil Search are down almost 1 percent each, while Santos is losing more than 1 percent after crude oil prices fell overnight. In the mining space, BHP Billiton and Fortescue Metals are up almost 1 percent each, while Rio Tinto is adding more than 1 percent after iron ore prices surged. Gold miner Newcrest Mining is adding 0.2 percent and Evolution Mining is rising 0.3 percent. Transurban reported a full-year profit that more than doubled from last year on higher revenue. However, the toll road operator’s shares are declining almost 3 percent. James Hardie’s first-quarter profit fell 34 percent, partly reflecting higher production costs that offset an increase in sales. The building materials supplier’s shares are lower by almost 4 percent.

In economic news, Australia will see July results for the business confidence and conditions indexes from NAB today. In the currency market, the Australian dollar is lower on Tuesday against the U.S. dollar. In early trades, the local unit was trading at US$0.7912, down from US$0.7924 on Monday. On Wall Street, stocks closed modestly higher on Monday, with the Dow climbing to a new record closing high for the ninth consecutive session, partly reflecting ongoing positive sentiment following last Friday’s upbeat monthly jobs report. While the Nasdaq climbed 32.21 points or 0.5 percent to 6,383.77, the Dow edged up 25.61 points or 0.1 percent to 22,118.42 and the S&P 500 rose 4.08 points or 0.2 percent to 2,480.91. The major European markets turned in a mixed performance on Monday. While the German DAX Index fell by 0.3 percent, the French CAC 40 Index inched up by 0.1 and the U.K.’s FTSE 100 Index rose by 0.3 percent. Crude oil futures fell on Monday after a recovery in output at Libya’s largest oil field and as oil exporters met to discuss a deal to limit output. WTI crude for September delivery slipped $0.19 to $49.39 a barrel on the New York Mercantile Exchange.