By Robb M. Stewart
MELBOURNE, Australia--Australian shares fell for a third
straight day Friday, dipping ahead of a long weekend as stocks
across the region edged lower on signs of weakness in China's
economy and amid a flurry of corporate earnings.
"The wobbly start to the year for share markets continued over
the past week," said Shane Oliver, head of investment strategy at
AMP Capital in Sydney, who nevertheless expects shares to perform
well as profits pick up and interest rates remain low.
The S&P/ASX 200 fell 0.4% to 5240.9, leaving the benchmark
index down 1.2% for the week as big banks and retailers lost
ground. The market will be closed Monday for Australia Day.
A spat of economic releases weighed on investor sentiment, led
by weaker-than-anticipated manufacturing data and cooling economic
growth out of China, as well as domestic inflation data that
suggested Australia's central bank has no pressing need to cut
interest rates further.
Mr. Oliver, who has forecast the ASX 200 to rise to about 5800
by the end of the year, said he continues to believe that the
Reserve Bank of Australia will leave interest rates on hold until a
modest hike late in 2014.
Financial stocks weighed heavily on the Australian market
Friday, with Westpac Banking, National Australia Bank and Australia
& New Zealand Banking each down 1%.
Tom Piotrowski, market analyst at Commonwealth Securities, said
discretionary retailers were also under pressure after the
inflation data for the December quarter and trading updates from
several companies.
The Reject Shop slumped 32% following an update in which it
cited weak trading in the lead-up to Christmas and discounting for
soft sales in its fiscal first half. Among others, department store
chains Myer and David Jones were down 4.2% and 4%.
Healthcare shares finished the day broadly flat after
contrasting earnings reports. CSL rose almost 1.1% after U.S. peer
Baxter International forecast 2014 sales growth of 9%-10%, while
ResMed shares dropped 4.9% after disclosing disappointing quarterly
revenue at its American operations.
Bucking the broader trend, Newcrest Mining shares recovered 3.8%
as investors digested news a day earlier that the gold producer is
aggressively cutting spending.
Write to Robb M. Stewart at robb.stewart@wsj.com