The share market recovered most of the ground lost in a poor start to the day but has still closed marginally lower, as weaker iron ore prices weighed on the mining sector.
Investors are also waiting on the US Federal Reserve's statement on Thursday morning (Australian time) on its monetary policy stance.
The benchmark S&P/ASX200 index dropped 4.5 points, or 0.1 per cent, to 5,709.1 points.
CMC Markets chief market analyst Ric Spooner said the selling evident on the market on Tuesday afternoon had spilled over into Wednesday morning, and when prices got low enough some buyers came back in.
"The significant drop in iron ore prices has also been well on the negative side of the ledger for the market today, with materials down as well as being a negative generally for the Australian economy," Mr Spooner said.
Investors are waiting to hear the US Federal Reserve's view on the expected pace of interest rates hikes in the US, and will be watching for any indication that they are getting nervous about the current trajectory, Mr Spooner said.
"If they were to do that, it would be based on the run of soft data on core inflation that we've seen in the US over the last six months," he said.
The Australian dollar has improved, jumping well above 80 US cents as the US dollar weakened overnight against a range of major currencies.
On the share market, Fortescue Metals dropped 1.8 per cent to $5.33, Rio Tinto lost 1.2 per cent to $66.06 and BHP Billiton fell 0.4 per cent to $26.19.
Among the major banks, ANZ was the worst performer, dropping 0.6 per cent to $30.03, while Commonwealth Bank was the only one to gain ground, edging up 0.01 per cent to $76.29.
The gains made by TPG Telecom on Tuesday after the company posted annual profit growth were wiped out by a 6.7 per cent fall to $5.12.
Telstra also lost ground, dropping 1.4 per cent to $3.60.
Seven Group Holdings surged $1.10, or 9.8 per cent, to $12.28 after the company announced it will buy the remaining stake in equipment hire company Coates Hire for $517 million.
ON THE ASX:
* The benchmark S&P/ASX200 was down 4.5 points, or 0.08 per cent, at 5,709.1 points at 1630 AEST.
* The broader All Ordinaries index was down 2.7 points, or 0.05 per cent, at 5,769.7 points.
* The SPI200 futures contract was down three points, or 0.05 per cent, at 5,711 points.
* National turnover was 3.5 billion securities traded worth $5.2 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 80.38 US cents, from 79.81 US cents on Tuesday
* 89.61 Japanese yen, from 89.16 yen
* 66.99 euro cents, from 66.54 euro cents
* 59.48 British pence, from 58.99 pence
* 109.24 NZ cents, from 109.67 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,312.20 per fine ounce, from $US1,307.60 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.0735pct, from 2.0678pct on Monday
* CGS 4.75pct April 2027, 2.7758pct, from 2.7638pct
Sydney Futures Exchange prices:
* December 2017 10-year bond futures contract at 97.14 (implying a yield of 2.86pct), from 97.155 (2.845pct) on Tuesday
* December 2017 3-year bond futures contract at 97.78 (2.22pct), from 97.79 (2.21pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
In the U.S., the S&P 500 ended slightly higher on Wednesday after the Federal Reserve signaled that it expects another rate hike by year end and said it would begin reducing its balance sheet.
The Dow Jones Industrial Average .DJI rose 41.79 points, or 0.19 percent, to 22,412.59, the S&P 500 .SPX gained 1.59 points, or 0.06 percent, to 2,508.24 and the Nasdaq Composite .IXIC dropped 5.28 points, or 0.08 percent, to 6,456.04.
The U.S. Federal Reserve left interest rates unchanged on Wednesday but signaled it still expects one more increase by the end of the year despite a recent bout of weak inflation.
New economic projections released after the Fed’s two-day policy meeting showed 11 of 16 officials see the “appropriate” level for the federal funds rate, the central bank’s benchmark interest rate, to be in a range between 1.25 percent and 1.50 percent by the end of 2017.
That is one-quarter of a point above the current level.
Financial markets barely moved after the release of the statement and projections. There also was little reaction to the Fed’s announcement that it would begin decreasing its balance sheet next month, perhaps confirming its hope that the portfolio runoff would be as exciting as “watching paint dry.”
“The Fed did a good job telegraphing what they were going to do and then they followed through with it, so I‘m not sure the market (had) all that much of a reaction to it,” said Michael Arone, chief investment strategist with State Street Global Advisors in Boston.
In its policy statement, the Fed cited strength in the job market, growth in business investment and an economic expansion that has been moderate but durable this year. It added that the near-term risks to the economic outlook remained “roughly balanced” but said it was “closely” watching inflation.
Fed Chair Janet Yellen said in a press conference after the end of the meeting that the fall in inflation this year remained a mystery, adding that the central bank was ready to change the interest rate outlook if needed.
Source: Netwealth Morning Business Roundup
For your breakky dining pleasure, I have served up ricotta spread toast topped with banana and raspberries as well as pineapple orange juice.
It's International Day of Peace. With all the conflict in the world today, why can't we just "give peace a chance?"
