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Healthcare stocks drag ASX lower despite iron ore strength

Investors had another flood of earnings to digest on Tuesday, but in the absence of a lead from Wall Street due to a public holiday the overall market tread water for most of the session.The benchmark S&P/ASX200 finished down 0.1 per cent to 5791.0, while the broader All Ordinaries ended down 0.1 per cent 5835.4.
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The benchmark ASX200 finished down 0.1 per cent to 5791.0, while the broader All Ordinaries ended down 0.1 per cent 5,835.4. Photo: Michel O’Sullivan Regardless, iron ore miners posted some of the biggest gains, after the bulk commodity hit a 2.5-year high of $US92.34 a tonne overnight, while Chinese iron ore futures were up 3.7 per cent at 731 yuan in late local trade on Tuesday.Iron pure-play Fortescue Metals was 2.7 per cent higher, making it one of the ASX200’s biggest gainers, while big miners BHP Billiton and Rio Tinto added 1.0 per cent and 2.0 per cent respectively. BHP reported first-half earnings after the close of the local market. Arnhem Investment Management partner Simon Twiss said commodity price rises played through the market on Tuesday. “Rio Tinto is more exposed to iron ore than BHP, so it is up more,” he said. Not all miners had a good day – South32 fell 2.7 per cent. Mr Twiss noted the company isn’t exposed to iron or copper – the two commodities that saw overnight gains. 

The big four banks ended the day mixed. ANZ was down 0.8 per cent, Westpac and CBA were flat, while NAB added 0.8 per cent. Westpac posted a funding and asset quality update before the market opened, but unlike its peers did not disclose profit or revenue numbers.”There’s a truckload of volume going through our banks,” said Mr Twisse. “We’re seeing double the volume of a normal day in Westpac, and double the volume in ANZ.” While their losses weren’t the largest in percentage terms, by virtue of their large market capitisation, healthcare stocks were the biggest drag on the index. Blackmores was 1.5 per cent lower, Cochlear fell 0.9 per cent, CSL shed 0.4 per cent while Ramsay Health Care lost 0.6 per cent. The ASX200 healthcare index as a whole was 0.4 per cent lower.In percentage terms the day’s biggest loser was Independence Group, which lost 6.2 per cent after lowering its guidance on its Nova mine project. Aconex, which also reported today, saw its share price shed 6.2 per cent. Stock watch: Worley ParsonsWorleyParsons shares remained under pressure amid worries the company may have to tap investors for cash. The shares dropped 5.1 per cent to $8.16 after sliding nearly 13 per cent on Monday following a disappointing earnings report that revealed a net loss of $2.4 million. The engineering services provider also said net debt was up 18.5 per cent to $920.9 million and debt to earnings had risen to 2.6 times by December 31, from 2.4 times at the end of June, while operating cash flow was negative $84.8 million. While Worley chief executive Andrew Wood was quick to say there were no plans for an equity raising, analysts and fund managers are sceptical. In the absence of a dramatic improvement in the collection of receivables, analysts were telling investors to brace for a cash call before the financial year is out. CLSA analyst Andrew Johnston says the company is sailing close to a debt covenant breach which would trigger a capital raising.Market movers Hits and missesMonadelphous Group posted a 24 per cent net profit fall, but that didn’t hurt the shares in the engineering company, which have gained strongly in recent days and were up again on Tuesday – 11.5 per cent to $13.16. Seven Group Holdings swung to a $41.8 million first-half loss from a year-earlier profit of $7 million as it wrote down the value of its big asset, Seven West Media – its shares nonetheless were up 0.5 per cent. Meanwhile Aconex, which posted a guidance downgrade in late January…

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