Australian shares took a stab at extending a remarkable recent rally into a third week on Monday but early gains petered out to consign the ASX to its first fall in nine sessions.
The benchmark S&P/ASX 200 fell 12 points or 0.2 per cent to 5894, while the All Ordinaries dropped by a similar margin to 5957.
A solid end to the week on Wall Street set the scene for early buying in Australia, as investors responded positively to heightened hopes of tax reform in the United States.
Banks were the primary drag on the bourse. ANZ Bank lost 0.2 per cent after the lender surprised the market by settling with the corporate regulator in its case for allegedly fixing the bank bill swap rate. NAB and Westpac are also under investigation by the regulator for rate-rigging. NAB ended the session up 0.3 per cent while Westpac lost 0.3 per cent and CBA fell 0.4 per cent.
The ASX 200 sharemarket index has jumped more than 240 points over the past two weeks, with the move pushing the index within striking distance of 6000. The benchmark measure hasn't traded above that level since early 2008, despite numerous attempts over the past two-and-a-half years.
The ASX 200 "is looking overbought in the short term," Romano Sala Tenna, portfolio manager at Katana Asset Manager, said. "It's a 50/50 call whether we'll get there on the current push, but we should get there by Christmas."
Telecom companies were among the strongest performers in Australian trading following a decision by competition regulator the ACCC not to force Telstra and Optus to share their mobile networks with competitors.
"Telstra's having a good day after the ACCC announcement but this is likely to just be a nice little kick in the short term, the issues with that stock are structural and a general increase in competition," Mr Sala Tenna said.
TPG Telecom added 1.2 per cent while Chorus gained 1.4 per cent. Telstra climbed 0.9 per cent. Smaller rival Vocus jumped by more than 5 per cent not long after the open after the company announced it had entered into a deal to sell its New Zealand business and Australian data centres and also confirmed fiscal 2018 guidance. But the stock quickly gave up those gains to end the day down 0.4 per cent.
Citi analysts said that they remain concerned about the magnitude of Vocus' transformation plan and the risk of timelines slipping in key projects. They see risk that the company's target of $120 million of cost savings by 202 could be pushed out further.
Super Retail Group's shares dropped 1.3 per cent after it said its auto accessories business has enjoyed a strong start to 2018 but growth in sporting goods and leisure has been subdued as shoppers cut back on discretionary spending.
Stock Watch: Bubs Australia
Shares in the speciality infant formula and organic baby food group rocketed 30 per cent higher on Monday, closing at 84??. Investors were ecstatic at Bubs' first-quarter update to the market which showed a 109 per cent increase in gross sales on the prior corresponding period to $1.7 million. That's a 22 per cent increase on the fourth-quarter of FY 2017. Additionally, gross margins improved 119 per cent on the same period last year and 29 per cent on the previous quarter. According to the release, this growth was driven by increased infant formula sales in both domestic grocery channels and selected China cross-border e-commerce channels. First-quarter sales to China grew 274 per cent versus the same period last year.
Crude
Oil prices are still rising after OPEC and its partners, including Russia, achieved a record level of compliance to output cuts during September, according to a statement Saturday from the committee responsible for monitoring the agreement. In the US, drillers reduced the rig count for a third week to the lowest since June. Oil is holding gains near $US52 a barrel on speculation OPEC will decide to extend supply curbs past the end of March when it meets in Vienna on November 30. Geopolitical tensions in northern Iraq have also helped to support prices the past week, with Iraqi forces regaining control of Zummar town where Batma and Ain Zala fields are located.
Gold
Gold prices have fallen after the US Senate approved a budget blueprint that paves the way for tax cuts last week. Bullion was fetching $US1276 an ounce on Monday afternoon, slightly lower for the day. Investors betting on faster economic growth as a result bought riskier assets while bond holders reduced their positions on worries that inflation and federal borrowing could rise. Higher bond yields increase pressure on bullion because gold does not offer a yield, while a stronger dollar makes it more expensive for holders of other currencies.
Chinese property
China home prices rose in the fewest cities since January 2016, adding to signs of a property slowdown as curbs on buyers bite. New-home prices, excluding government-subsidised housing, in September rose in 44 of 70 cities tracked by the government, compared with 46 in August, the National Bureau of Statistics said on Monday. Prices fell in 18 cities from the previous month and were unchanged in eight. Stabilising home prices in the nation's largest cities is a welcome sign for Communist Party leaders gathered in Beijing to map policy for the next five years.
Japanese elections
Shares around the region advanced after Japanese Minister Shinzo Abe's ruling coalition retained its two-thirds parliamentary majority in Sunday's general election, according to unofficial results. A large win for Abe's coalition would pave the way for more ultra-easy monetary policy and flexible fiscal stimulus that has boosted Japanese stocks and helped Asia's second-biggest economy grow for six straight quarters. The benchmark Topix index is at a 10-year peak, and added 0.8 per cent on Monday, while the Nikkei 225 Stock Average climbed 1.1 per cent and has climbed to the highest since 1996 to match a record 14-day winning streak.
