Aust stocks close more than 1% lower

Local market drops on global rotation out of equities, investors await Fed minutes overnight.

The Australian sharemarket closed sharply weaker today in thin trade amid a global rally out of equities and into bonds as the outlook for Europe softens.

At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was 58.4 points, or 1.06%, lower at 5,452.5 points, while the broader All Ordinaries index lost 56.3 points, or 1.02%, to 5,442.2 points.

CMC Markets chief market strategist Michael McCarthy said the "buyer's strike" in local trade after downbeat Wall Street leads was unsurprising, given investors are waiting for tomorrow's US Federal Reserve meeting minutes, local job numbers and China's trade balance. 

"It appears there is a rally out of equities and into bonds. It's not just in Australia, it's a global phenomenon," Mr McCarthy said.

He said the rotation might be related to the weaker than expected outlook for Europe following soft industrial activity numbers.

"The iron ore price rallied yesterday but that's not turning up in the market today," he said. 

"And consumer confidence rose but the response from investors is that it didn't seem to rise enough."

The consumer discretionary sector led the market lower, falling 2.66% after the Westpac-MI July consumer sentiment index barely recovered from the federal budget.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles