Profit taking puts end to 10-day surge

THE sharemarket has finished lower, ending 10 straight days of gains, with investors taking profits ahead of the beginning of reporting season next week.

The benchmark S&P/ASX 200 Index fell 17.9 points, or 0.4 per cent, to 4878.8, while the broader All Ordinaries lost 18.1 points, or 0.4 per cent, to 4901. For the month, the ASX 200 was up 4.94 per cent.

"The market got a bit ahead of itself and, with the uncertain macro factors we saw last night in the US [GDP], it's prompted consolidation," said BBY institutional trader Anson Rosewall.

Investors were erring on the side of caution, said Mr Rosewall, with the reporting season due to kick off next week.

"[The day] has an overall theme of profit taking, with people not being sure of what exactly to do and that's kind of evident in the mixed rotation we're seeing across the different ASX 200 sectors," he said.

Woolworths fell 1.3 per cent to $31.24 after reporting disappointing quarterly sales results, while Wesfarmers also lost ground, down 1.4 per cent to $37.60.

Despite the iron ore price rising to $US149.40 a tonne, the big miners lost ground. Rio Tinto fell 1.1 per cent to $66.36, BHP Billiton slid 0.4 per cent to $37.48 and Fortescue lost 1.1 per cent to $4.68.

After leading most of the 10-day rally forward, the big four banks eased back, with NAB the biggest loser, down 1 per cent to $27.36.

Retail shares also struggled. Myer fell 2.7 per cent to $2.49, while David Jones lost 1.6 per cent to $2.50 and Harvey Norman dropped 1.8 per cent to $1.96. JB Hi-Fi bucked the trend, gaining 0.2 per cent to $9.90.

Mr Rosewall said he expected trading volumes to be relatively weak next week, but activity should pick up once major companies began reporting.

"It might give investors the conditions to resume buying, but it also might give them a reality check to see whether gains in share prices match up with earnings growth and expected guidance for the financial year," he said.

Whitehaven Coal fell 5.48 per cent to $3.28 after it warned first-half earnings would fall due to weak coal markets and the high dollar.

A report from ratings agency Standards and Poor's warning of the Australian economy's reliance on the mining sector took its toll on the dollar, which is well off its January peak of US105.75¢, sliding about half a cent to US104¢. S&P, which examined several single-sector reliant countries, said Australia was at an intermediate risk of a slowdown in the resources sector.

"As we head into the [RBA] announcement, any sort of economic data suggesting weakness in the Australian economy will triggering selling in the Aussie dollar," Mr Rosewall said.