The share market has lost ground due to a broad sell-off of banks, insurers and other financial stocks, and the Australian dollar's surge above 80 US cents was tempered by slightly weaker than expected economic growth.
The benchmark S&P/ASX200 index dropped 0.29 per cent to 5,689.7 points, as the financial sector's fall outweighed gains by mining and oil producers.
Commsec analyst Steven Daghlian said the financial sector, led by the big four banks, has now fallen two per cent in the first week of September, on top of the three per cent shed in August.
"The major banks continue to weigh on the market, they failed to shoot the lights out again today, while in the neighbouring insurance space there are a few stocks trading ex-dividend placing broader pressure on the sector as a whole," Mr Daghlian said.
Commonwealth Bank was again the weakest of the banks, down 1.2 per cent, Westpac shed 1.1 per cent, National Australia Bank dropped 0.7 per cent ANZ was 0.5 per cent weaker.
Insurer IAG was trading ex-dividend and lost 3.9 per cent to $6.20, while Medibank Private fell two per cent to $3.00, QBE also fell two per cent to $10.10 and Suncorp was 2.1 per cent weaker at $12.53.
After the price of oil rose as demand for crude was encouraged by US oil refineries coming back online following Hurricane Harvey, the energy sector was higher.
Origin Energy gained 0.8 per cent, Oil Search added 1.7 per cent and Santos was 2.4 per cent higher.
"The best performing areas of the market have been the defensive stocks, with gold miners ahead and the price of iron ore edging higher overnight," Mr Daghlian said.
BHP overcame an early fall to add 0.4 per cent to $27.73, Rio Tinto gained 0.2 per cent to $68.25 and Fortescue Metals was 0.5 per cent stronger at $5.96.
Gold miner Newcrest's gains evaporated in late trade, and it ended 0.04 per cent higher to $23.49.
The Australian dollar hit 80.28 US cents overnight but fell back below 80 US cents after the release of the June quarter gross domestic product figures, which showed slightly weaker than expected economic growth of 0.8 per cent in the quarter, and 1.8 per cent annual growth.
ON THE ASX:
* The benchmark S&P/ASX200 dropped 16.5 points, or 0.29 per cent, to 5,689.7 points.
* The broader All Ordinaries index shed 14.9 points, or 0.26 per cent, to 5,752.9 points.
* The September SPI200 futures contract was down 18 points, or 0.32 per cent, at 5,674 points.
* National turnover was 2.9 billion securities traded worth $6.1 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 79.81 US cents, from 79.75 US cents on Tuesday
* 86.73 Japanese yen, from 87.17 yen
* 66.94 euro cents, from 67.00 euro cents
* 61.29 British pence, from 61.68 pence
* 110.49 NZ cents, from 111.18 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,338.04 per fine ounce, up from $US1,335.46 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.20 per cent April 2020, 1.8865pct, from 1.9371pct on Tuesday
* CGS 4.75pct April 2027, 2.5463pct, from 2.6231pct
Sydney Futures Exchange prices:
* September 2017 10-year bond futures contract at 97.405 (implying a yield of 2.595pct), from 97.33 (2.67pct) on Tuesday
* September 2017 3-year bond futures contract at 98.03 (1.97pct), from 97.98 (2.02pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
In the U.S. Wall Street climbed on Wednesday, boosted by energy shares and helped by news of an agreement to extend the debt limit, as stocks bounced back from a day-earlier selloff.
U.S. stocks built on moderate gains after news that President Donald Trump, siding with Democrats over his fellow Republicans, said he agreed to pass an extension of the U.S. debt limit until Dec. 15, potentially avoiding an unprecedented default on U.S. government debt.
Data showed U.S. services sector activity accelerated in August amid strong gains in new orders and employment, while another report showed only a modest rise in the trade deficit in July - the latest signs that the economy had gathered momentum early in the third quarter.
A Federal Reserve survey showed the U.S. economy expanded at a modest to moderate pace in July through mid-August.
The S&P 500 on Tuesday had suffered its biggest single-day decline in nearly three weeks amid fresh tensions involving North Korea and a second powerful hurricane bearing down on the U.S. south.
“You have opposing forces kind of keeping the market from breaking out to a new high, but yet the fundamental data seem to be keeping it from breaking down and selling off significantly,” said Walter Todd, chief investment officer of Greenwood Capital in Greenwood, South Carolina.
“You kind of have these opposing forces pushing on each other and keeping the market in a very narrow range,” Todd said.
The Dow Jones Industrial Average .DJI rose 54.33 points, or 0.25 percent, to 21,807.64, the S&P 500 .SPX gained 7.69 points, or 0.31 percent, to 2,465.54 and the Nasdaq Composite .IXIC added 17.74 points, or 0.28 percent, to 6,393.31.
Despite Tuesday’s fall, the benchmark S&P 500 ended on Wednesday within 15 points of its record closing high.
“The natural trend in the market is to run scared at the first sign of trouble and then to bounce back,” said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts. “Once investors had a chance to digest some of the events, they realized that from a domestic point of view, it simply isn’t that bad.”
The energy sector .SPNY rose 1.6 percent, for its biggest single-day gain in two months, as oil prices rose. Strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Hurricane Harvey.
Two-percent gains for shares of oil majors Exxon Mobil (XOM.N) and Chevron (CVX.N) supported the S&P 500 and the Dow.
Financials .SPSY climbed 0.2 percent a day after their largest one-day drop since mid May. Nine of 11 major sectors finished in positive territory.
Investors were digesting news that Fed Vice Chair Stanley Fischer said he would step down from his position in mid-October, potentially accelerating Trump’s opportunity to reshape the direction of the central bank.
AT&T (T.N) shares fell 1.4 percent and Verizon (VZ.N) slid 1.0 percent, dragging on the S&P. Rival T-Mobile US (TMUS.O) said it will offer a free subscription to video streaming service Netflix (NFLX.O) with its unlimited data family plans.
Advancing issues outnumbered declining ones on the NYSE by a 1.65-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favored advancers.
About 6.3 billion shares changed hands in U.S. exchanges, above the 5.8 billion daily average over the last 20 sessions.
Source: Netwealth Morning Business Roundup
Something to nibble at your trading desk for brekky - Muesli cookies with pepitas and dried cranberries and some mango juice.
