Australian shares fell on Monday following a late drop by mining stocks while financials constituted the biggest drag ahead of a widely expected interest rate cut by Australia's central bank the next day. The S&P/ASX 200 index fell 0.4% or 27.8 points to 6,688.3 by the close of trade. The benchmark stock price index ended September with a gain, after a drop in August that snapped a seven-month winning streak.
The 'Big Four' banks led the losses, falling 0.4% to 0.9%. Trading was light as investor sentiment was largely cautious following mixed economic data from China coupled with news that the US administration is considering delisting Chinese companies from US securities exchanges. "The possibility of implementing this idea however, remains low at the moment as the negative impact to US capital markets is likely to far outweigh the benefits that the White House could possibly get on the trade front," said CMC Markets analyst Margaret Yang in Singapore.
Investors are keenly eyeing what may come of Sino-US trade talks that are likely to be held next week for further trading catalysts. Factory activity in China pointed to slight improvement in September as domestic demand picked up but the outlook for the overall manufacturing sector showed sustained weakness. Oil prices fell as the overall economic outlook for China remained weak despite some upbeat factory data, hurting energy stocks. However, Woodside Petroleum Ltd was the only oil major in Australia that ended in the green as Credit Suisse said it sees more upside to its share price.
Woodside gained 1.1% but rivals such as Santos Ltd and Oil Search Ltd ended lower following earlier gains. Similarly, mining stocks edged lower toward the end of the session with Rio Tinto Ltd the only major miner gaining. According to a media report, Rio has cancelled plans to sell or float its Canadian iron ore business after attempts to find buyers were unsuccessful.
Nufarm Ltd halved its intraday gains after jumping nearly 56% when it announced it will sell its South American crop protection and seed treatment assets to its biggest shareholder, Japan's Sumitomo Chemical Co Ltd, for A$1.19 billion ($803.37 million). New Zealand's benchmark S&P/NZX 50 index rose 0.8% or 89.12 points to 10,925.62. a2 Milk Company Ltd and Fletcher Building Ltd were up 1.4% each.