By Robb M. Stewart
MELBOURNE--Australian stocks pulled back Monday as a drop in telecommunications and financial companies offset gains by resources shares.
After rising in the previous two sessions, the S&P/ASX 200 closed 9.6 points, or 0.2%, lower at 5755.5.
Though it was a soft start to the week, the market finished off early lows after data on China's economy beat forecasts.
Trading volume for the day was light. The telecom sector fared the worst, as Telstra, which fell 1.9%, had its weakest day since April 18. Its shares have fallen 17% this year on concerns about the sustainability of its dividend payout and an expected earnings squeeze as the government rolls out its National Broadband Network.
Among financial stocks, Medibank Private stumbled 3.8% after Goldman Sachs downgraded its assessment of the health-care insurer from neutral to sell, reflecting the risk of weakening policyholder growth across the industry and declining participation by young people.
The major banks also faltered, tracking moves on Wall Street on Friday after a series of earnings results from U.S. lenders.
National Australia Bank lost 0.7%, Westpac Banking and Australia & New Zealand Banking were each down 0.4% and Commonwealth Bank of Australia was 0.2% lower.
Still, diversified mining companies BHP Billiton and Rio Tinto gained 0.2% and 0.6%, respectively, while Fortescue Metals Group advanced 1.9% and South32 climbed 4.7%.
China, the world's biggest consumer of a raft of commodities including iron ore, maintained the pace of economic growth in the second quarter. Also, industrial production grew at a faster pace in June than in the previous period. The data buoyed Chinese steel rebar and iron-ore futures.
Crude-oil futures were also higher in Asian trading, adding to gains recorded each day last week, helping buoy energy stocks. Woodside Petroleum added 0.8%, Oil Search was 1.7% stronger and Santos picked up 2.7%.
About 1.9 billion shares were traded Monday with a value of 3.9 billion Australian dollars (US$3.1 billion), Commonwealth Securities said.
Write to Robb M. Stewart at [email protected]