The ASX slid lower on Monday as disappointing earnings updates from Brambles and WorleyParsons sparked heavy selling in their shares and as investors took profits in mining stocks.
The benchmark S&P;/ASX 200 index shed 11 points or 0.2 per cent to 5795.1, while the broader All Ordinaries index closed down by a similar margin to 5840.5.
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With little momentum from Wall Street, results disappointments certainly dragged the market lower on Monday.
Engineering firm WorleyParsons, Monday's biggest loser, closed down 12.8 per cent, as investors slashed $1.65 billion from the company's market capitalisation. Also weighing heavily was a 9.9 per cent plunge in Brambles shares, responsible for more than half the ASX 200's daily losses, after the company's half-year net profit fell 50 per cent.
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A range of consumer stocks, including Myer Holdings, JB Hi Fi and Wesfarmers also fell on Monday, 3.4 per cent, 1.9 per cent and 1.74 per cent lower respectively.
Despite the negative headlines on Monday, earnings season has been "so far so good," UBS equity strategist David Cassidy said.
"Results have been tilted to the positive," he said, with average earnings per share up 1 per cent. "A clear trend has been upbeat or positive guidance for many companies."
But Mr Cassidy noted that "share price reactions to the results have been marginally negative, despite a flurry of positive reactions early on."
Among Monday's winners was G8 Education, despite full-year profit falling 9 per cent. It closed up 3.7 per cent. BlueScope Steel was the day's biggest gainer, jumping 4 per cent after delivering a 79 per cent profit surge in the first half and announcing a $150 million share buyback. NIB Holdings added 8.3 per cent after its earnings update.
Other stocks to trade notably higher were Resolute Mining, Treasury Wine Estate and APN Outdoor group, up 3.9 per cent, 3.7 per cent and 3.2 per cent respectively. Monadelphous Group, the highest-gaining stock last week, added a further 2.6 per cent after announcing a proposed services contract with Oil Search.
The big banks helped keep the index's losses minimal. ANZ was up 0.4 per cent, CBA added 0.6 per cent, while Westpac rose 0.7 per cent. NAB bucked the trend, closing flat.
Australia's miners eased lower. BHP closed down 0.6 per cent, while Rio Tinto shed 0.2 per cent.
Outside the top 200 names, shares in business services company CSG Limited were smashed after its disappointing earnings results - it's trading at a its lowest levels since March 2013, down 33 per cent to 46c.
Stock Watch: Worley Parsons
Shares in mining services provider WorleyParsons were punished on Monday, falling 12.8 per cent to $8.60. The company raised its cost-cutting target to offset slumping earnings in its engineering services business, forcing the company into a $2.4 million interim net loss. The company, which reported a $23.1 million interim profit a year ago, said it now planned to cut $450 million in costs by the end of 2016-17, up from $300 million previously after group revenues slid 35 per cent to $2.7 billion. Although the company slashed $220 million of costs in the first half, it said the cutbacks did not offset "market contraction" and underlying net profits also fell, dropping 23 per cent to $57.1 million.
Oil
The price of brent crude has been trading in the tightest trading range in 13 years, as investors weigh a pick-up in US drilling activity against the Organisation of Petroleum Exporting Countries production cuts. Oil held above $US53 a barrel on Monday. Futures in New York are trading largely sideways, while US drillers upped the rig count to the highest since January 2004. Oil has maintained its position above $US50 a barrel since OPEC and 11 other oil-producing nations pledged to cut output in a bid to stabilise prices.
Coal
China's coke and coking coal futures were up on Monday after Beijing suspended imports of North Korean coal as part of its efforts to implement United Nations sanctions against its northern neighbour. The most-active May coke futures were up 1.3 per cent at 1709.5 yuan ($US249.05) per tonne, while coking coal futures were also up 1.3 per cent at 1250 yuan. China stopped all imports of coal from North Korea from Sunday, the country's commerce ministry said in a notice posted on its website on Saturday. The ban on the isolated country's biggest export will be in place until December 31.
Brambles
Shares in Brambles tumbled 9.9 per cent after the company forecast it will report a flat full-year underlying profit after posting a 3 per cent rise in first-half underlying profit amid increased competition in its North American business. The pallets and container group, which surprised the market with a profit downgrade on Jan. 23, said CEO-designate Graham Chipchase would take over from outgoing boss Tom Gorman today, a week earlier than expected. Brambles reported an underlying profit of $468.9 million for the six months ended Dec. 31, which, adjusted for currency changes, was in line with its latest guidance for a 3 per cent rise in underlying profit.
Hits and misses
These days it is not unusual for a company that has not previously issued a profit warning to disappoint the market on the day of its results, and to then see its shares absolutely smashed. The three biggest negative performers were logistics group Brambles, down 9.9 per cent, engineering consulting company WorleyParsons, down 12.8 per cent, and technology and software group CSG, down 33.3 per cent. The three biggest positive performers were adventure tourism company Skydive the Beach Group, up 6.1 per cent, health insurer NIB Holdings, up 8.3 per cent, and G8 Education, up 3.7 per cent.