Investors sent the ASX tumbling on Monday ahead of an onslaught of economic data this week and turmoil over immigration and trade uncertainty in the United States.
There was broadbased selling with technology stocks weighing heaviest on the bourse. During a session of thinned Asian trading with Chinese markets closed, oil prices slid, meaning there was no support from resource heavyweights.
Traders said they will be relieved when more company news begins flowing through, rather than relying on global macro sentiment pushing the market in either direction.
"That clear air that markets rallied into between mid-December and early January, where news flow dried up, has now become turbulent and disturbed air – and people want none of it," said Chris Conway, head of research at Australian Stock Report.
The benchmark S&P;/ASX 200 Index and the broader All Ordinaries Index each closed down 0.9 per cent to 5661.5 points and 5714.3 points respectively.
Investors are also positioning ahead of both the Bank of Japan and US Federal Reserve meetings this week and Chinese manufacturing data over the next few days, culminating in Friday's US non-farm payrolls data.
There was plenty of equities news around on Monday. Investors punished construction software company Aconex after it warned full-year profit would come in up to 35 per cent lower than analyst analysts. The stock dove 45.1 per cent to $3.10 and was the worst performing company in the ASX 200. The company said earnings before interest, tax, depreciation and amortisation is now expected to be between $15 million and $18 million, down from a previous range of $22 million to $25 million. Analysts were on average predicting $23.11 million.
Shares in Warnambool Cheese and Butter Factory shot up 25 per cent to $8.85 after its majority shareholder made a $8.85 per share cash offer to buy the rest of the company's stock. The shareholder, Saputo Dairy Australia, already owns 88 per cent of the company and has received Australian Foreign Investment Review Board approval.
Lithium miner Orocobre's shares fell 6.9 per cent after it reported a disappointing quarterly performance. Despite strong production, sales revenue plunged thanks to a port strike and customs delay over Christmas.
Resources giant BHP Billiton and main rival Rio Tinto weighed on the market, with both closing down 0.6 per cent and 0.03 per cent respectively. Pure iron ore player Fortescue Metals tumbled 2.3 per cent. The big four banks were not spared, with all closing between 0.5 per cent and 0.9 per cent lower.
The biggest food and liquor sellers also felt the pressure. Woolworths slipped 0.9 per cent and Wesfarmers, the owner of Coles 0.9 per cent.
Stock Watch: Telstra
Shares in Telstra took a 0.9 per cent hit. Telco analysts at Citi have issued a 'sell' recommendation for Telstra shares on fears revenue from mobile, fixed and data products will decline due to increased competition in the mobile and NBN markets. The analysts have given the shares a target price of $4.50, which is nearly 12 per cent lower than the current trading price of $5.06. Telstra's shares are currently down 0.8 per cent at $5.06. Citi forecast income and earnings to increase by about 3.5 per cent in the first half of 2016-17, which is at the lower end of Telstra's guidance of "low to mid single digit EBITDA growth". Telstra's results will be announced on February 16.
Gold
Gold's seesaw continued on Monday, with the spot price of the precious metal up 0.2 per cent to $US1193 an ounce, supported by a weaker greenback and as investors uncertainty over the outlook for US policy under President Donald Trump stoked safe-haven demand. It followed the metal's fall below $US1200 last week, that slashed the share prices of Australia's largest gold producers. They somewhat recovered by Monday's close – Newcrest Mining added 1.3 per cent, Northern Star Resources was up 2.7 per cent and Evolution Mining closed 1.4 per cent higher.
QBE
Australian insurer QBE surged then fizzled on Monday after German newspaper Handelsblatt reported that Allianz was in informal talks about conducting a $20 billion takeover of QBE that would value the company at $15 a share – a 22 per cent premium on Friday's close. The offer wasn't entirely unexpected - the AFR's Street Talk column reported last week that QBE was "firmly on the watch list of potential offshore acquirers". But QBE denied that it was in discussions with Allianz, which saw its share price reverse most of its gains. It closed up 0.2 per cent for the day.
RBA rates
NAB is sticking to its prediction of two RBA rate cuts this year. "This view reflects the expectation that GDP growth will slow in 2018 as housing construction slows, resource exports are no longer expanding and the benefit of the earlier large AUD depreciation starts to wane," chief economist markets Ivan Colhoun explains. Without further stimulus, this slow growth outlook should likely see the unemployment rate begin to rise, he says. Adding to the case for another rate cut is persistently low inflation, with fourth-quarter CPI once again coming in well below the RBA's 2-3 per cent target range last week.
Spotless
Cleaning and catering business Spotless is facing a possible class action over its 2015 financial results. Litigation funder IMF Bentham, working with William Roberts Lawyers, said it proposes funding Federal Court proceedings against Spotlight alleging that the company's 2015 results were misleading and in breach of the group's continuous disclosure obligations. Spotless has said it had complied at all times with its continuous disclosure obligations, and intended to vigorously defend any legal proceedings. The news has unnerved Spotless shareholders – the stock finished down 5.1 per cent.