Australian shares nudged into negative territory on Tuesday, with losses in financials and materials overshadowing early gains from top supermarket operator Woolworths after it announced plans to sell its struggling electronics chain. "Modest gains have fizzled out despite advances in retailers and defensives," said Ben Taylor, sales trader at CMC Markets.
Despite the loss, the market gained 5.1 percent in January, its first monthly rise since October. Three of Australia's big four banks slipped into negative territory late in the day, which analysts attributed to the strong local dollar and Fitch's move to put their credit ratings on watch for downgrade. Westpac bucked the trend with a 0.2 percent gain.
Miners were mixed. BHP Billiton fell 0.5 percent, while Rio Tinto rose 0.2 percent. The consumer staples sector led gains, buoyed by Woolworths even though it missed market forecasts for food and liquor sales growth in the second quarter. "The retailers have benefited today from the strategic decision by Woolworths for a partial closure of Dick Smiths stores," he added.
Shares in Woolworths climbed as much as 2.8 percent before trimming gains to end up 1.4 percent after it said it would sell its struggling Dick Smith electronics chain. Rival JB Hi-Fi jumped 6.6 percent to a seven-week high on news of the planned sale of Dick Smith. Shares in Gunns Limited soared 14.3 percent after announcing late on Monday that they had secured a 10 month extension of its syndicated debt facility. The benchmark S&P/ASX 200 index fell 0.2 percent to 4,262.7, according to the latest available data. The benchmark slipped 0.4 percent on Monday.
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