The Australian share market has closed lower, with the materials sector heavily sold down on shifting commodity prices and expectations of a correction.
The benchmark S&P/ASX200 index ended Wednesday down 0.54 per cent at 6,015.8 points , with the materials sector down more than two per cent.
A retreat in commodity prices triggered losses for BHP Billiton and Rio Tinto, down 2.9 per cent to $30.74 and 3.5 per cent to $78.45 respectively, after both miners lost ground on the London exchange overnight.
Macquarie Private Wealth division director Martin Lakos said traders had been anticipating a correction in the mining sector but any fall was likely to be short-lived.
"That materials space has been the outstanding, outperforming sector for the Aussie market - but whether its three per cent or 10 per cent - any correction is likely to be short-lived and shallow when the broad backdrop of fundamentals is in good shape," Mr Lakos said.
Fortescue Metals dropped three per cent and the gold miner Newcrest Mining lost 0.6 per cent.
Diversified miner South32 dropped 1.5 per cent to $3.92 despite showing a solid first half and maintaining full-year guidance for most of its businesses, except for its South African manganese production where it flagged an improvement.
In other company news, A2 Milk announced it will expand its US presence to north-eastern states and its shares gained 2.4 per cent to $7.60.
Rival infant formula maker Bellamy's Australia continued to gain ground after upgrading its full-year profit expectations on Tuesday, with the stock advancing 5.9 per cent to $14.48.
Sirtex Medical climbed 13.9 per cent to $17.83 after the cancer specialist announced a lift in expected first-half earnings and higher second-half sales.
A retreat in global oil prices from recent highs left local energy producers mixed, with Origin Energy up 0.4 per cent at $9.19, Woodside Petroleum down 0.5 per cent at $33.66 and Santos 0.8 per cent lower at $5.29.
The big four banks were lower at the close: ANZ down 0.3 per cent and National Australia Bank, Westpac and Commonwealth Bank all 0.6 per cent lower.
The Australian dollar had a brief gain after the release of ABS data showing a better-than-expected 2.3 per cent rise in home loan approvals for November but pulled back and at 1630 AEDT was trading at 79.51 US cents, from 79.64 US cents on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed down 32.8 points, or 0.54 per cent, at 6,015.8 points
* The broader All Ordinaries index was down 31.6 points, or 0.51 per cent, at 6,134.3 points
* The SPI200 futures contract was down 33 points, or 0.55 per cent, at 5,959 points
* National turnover was 4.6 billion securities traded worth $5.8 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 79.51 US cents, from 79.64 on Tuesday
* 88.14 Japanese yen, from 88.29 yen
* 64.92 euro cents, from 64.95 euro cents
* 57.71 British pence, from 57.77 pence
* 109.80 NZ cents, from 109.36 cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,334.36 per fine ounce, from $US1,340.04 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 2.0734pct, from 2.0559pct
* CGS 4.75pct April 2027, 2.7391pct, from 2.7241pct
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.20 (implying a yield of 2.80pct), from 97.225 (implying a yield of 2.775pct) on Tuesday
* March 2018 3-year bond futures contract at 97.775 (2.225pct), from 97.795 (2.205pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)
Wall Street’s main indexes were higher on Wednesday, led by technology and industrial stocks as well as a recovery in the financial sector.
Bank stocks were trading lower for much of the session following underwhelming results from Goldman Sachs and Bank of America.
Goldman Sachs was down 2.28 percent after posting its first quarterly loss in six years on tax-related charges and a sharp drop in trading revenue.
BofA fell 0.64 percent after the second-biggest U.S. lender reported profit that nearly halved as it booked a $2.9 billion charge due to the new federal tax law.
“You saw a lot of earnings estimates increase coming into earnings season, certainly after tax cuts. So one has to wonder if a lot of that optimism has been baked in,” said Marcelle Daher, co-head of North American asset allocation at John Hancock Financial Services in Boston.
“As you continue to see muted trading, and particularly a flattening of yield curve that tends to depress net interest margin, the bank stocks could be reacting to that.”
At 12:28 p.m. ET (1728 GMT), the Dow Jones Industrial Average was up 212.76 points, or 0.82 percent, at 26,005.62. The index hit the 26,000 milestone for the first time on Tuesday, its fastest 1000-point rise.
The S&P 500 was up 16.75 points, or 0.60 percent, at 2,793.17 and the Nasdaq Composite was up 42.32 points, or 0.59 percent, at 7,266.00.
Wall Street has rallied strongly in the new year, with the S&P 500 gaining 4.15 percent so far and posting only two sessions of losses, partly on hopes of a robust earnings season.
More than three-quarters of the 36 S&P 500 companies that have reported so far have topped earnings estimates, according to Thomson Reuters I/B/E/S.
Boeing jumped 3.7 percent after the company announced a joint venture with car seating leader Adient to make aircraft seats.
IBM rose 2.5 percent after Barclays analysts double upgraded the stock to “overweight” and hiked its price target by $59 to $192.
IBM, along with Microsoft’s 1.75 percent gain, lifted the S&P technology index by 0.88 percent.
Apple’s 0.25 percent fall was a drag on the sector after Longbow Research downgraded its stock to “neutral”, citing a “good, not great iPhone cycle”.
Ford slipped 7.10 percent after the automaker reported full-year profit below estimates and provided a downbeat forecast.
General Electric slipped more than 4 percent, extending losses from Tuesday when it announced more than $11 billion in charges.
Advancing issues outnumbered decliners on the NYSE by 1,822 to 1,006. On the Nasdaq, 1,730 issues rose and 1,151 fell.
Source: Netwealth Morning Business Roundup
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