THE sharemarket closed slightly lower amid renewed scepticism about the Greek bailout deal and concerns over the US fiscal cliff.
Investors turned their attention to defensive stocks after the resources sector fell.
At close, the benchmark S&P/ASX 200 Index was down 9.5 points, or 0.21 per cent, at 4447.3, while the broader All Ordinaries fell 10.8 points, or 0.24 per cent, to 4462.6.
RBS Morgans Brisbane senior private client adviser Bill Chatterton said the market had recovered slightly from the morning session, led by gains in defensive stocks, after the resources sector fell.
"There's been more of a focus on those stocks that have less volatile earnings," he said.
Telstra closed 4? higher at $4.33 while healthcare company CSL was up 29? at $50.30.
The big miners all posted losses. BHP Billiton finished 20? down at $34, Rio Tinto dived $1.08 to $56.70 and Fortescue slumped 5? to $3.80.
Of the big banks, NAB gained 5? to $23.88, ANZ was up 12? at $23.82, Westpac added 14? to $25.03 and Commonwealth Bank fell 24? to $58.98.
The Australian market took its early lead from a disappointing night on Wall Street where the Dow fell 0.69 per cent, or 89.24 points, to 12,878 over nervousness about political negotiations over the US fiscal cliff.
Locally, national turnover was 1.505 billion shares worth $3.418 billion.
Meanwhile, the dollar was trading on renewed concerns over the fiscal cliff of tax rises and spending cuts in the US. Late on Wednesday the dollar was at US104.46?, down from US104.80? on Tuesday.
The currency lost ground overnight after the US Senate Majority Leader, Harry Reid, warned that little progress had been made in talks between Democrats and Republicans trying to avoid the "fiscal cliff".
The parties are trying to find a way to bring down the US budget deficit without allowing the automatic tax hikes and spending cuts to go ahead, which could push the US back into recession.
On the debt markets, bond futures prices rose strongly, with the December 10-year contract at 96.865 (implying a yield of 3.135 per cent), up from 96.785 (3.215 per cent) on Tuesday.
The three-year contract was trading at 97.330 (2.670 per cent), up from 97.270 (2.730 per cent).
Nomura rates strategist Martin Whetton said that there was no specific data or news driving prices higher.
Crucial data - including capital expenditure numbers - would guide the market in coming days, Mr Whetton said.
Markets are pricing a 50-50 chance that the RBA will ease rates when it meets on Tuesday.
Frequently Asked Questions about this Article…
Why did the ASX200 and All Ordinaries close slightly lower today?
The sharemarket slipped amid renewed scepticism about a Greek bailout deal and nervousness over the US 'fiscal cliff'. The benchmark S&P/ASX 200 fell 9.5 points (0.21%) to 4,447.3 and the All Ordinaries dropped 10.8 points (0.24%) to 4,462.6, with weakness in the resources sector contributing to the fall.
What does a shift into defensive stocks mean for everyday investors right now?
Investors rotated into defensive names with less volatile earnings after resources fell. That put a spotlight on stocks like Telstra and CSL, which rose during the session, as investors sought steadier returns amid market uncertainty over Europe and the US fiscal talks.
How did major miners perform on the market day described in the article?
The big miners all posted losses: BHP Billiton finished down 20% at $34, Rio Tinto fell $1.08 to $56.70, and Fortescue slumped 5% to $3.80, reflecting weakness in the resources sector that weighed on the market.
What happened to major bank stocks during the session?
Bank performance was mixed: NAB reportedly gained 5% to $23.88, ANZ was up 12% at $23.82, Westpac added 14% to $25.03, while Commonwealth Bank fell 24% to $58.98, according to the article's reported prices.
How are the Australian dollar and bond markets reacting to US fiscal cliff concerns?
The Australian dollar lost ground amid fiscal cliff worries, trading at US$1.0446 (down from US$1.0480). Bond futures rallied: the December 10‑year contract was 96.865 (implying a 3.135% yield) and the three‑year contract was 97.330 (2.670%), both moving higher in price.
What does the article say about the RBA's next rate decision and how markets are pricing it?
Markets were pricing about a 50-50 chance that the Reserve Bank of Australia would ease rates at its upcoming meeting. Strategists noted that incoming data, such as capital expenditure numbers, would be crucial in guiding market expectations.
How much trading activity was there on the day — what was the market turnover?
Local turnover for the day was 1.505 billion shares worth A$3.418 billion, indicating the level of trading activity across the market that session.
Did international markets influence the Australian market that day?
Yes. The Australian market took an early lead from a disappointing night on Wall Street, where the Dow fell 0.69% (89.24 points) to 12,878 as investors grew nervous about political negotiations over the US fiscal cliff.
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