THE sharemarket closed slightly lower amid renewed scepticism about the Greek bailout deal and concerns over the looming fiscal cliff in the US.
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…
What drove the Australian sharemarket lower in this trading session?
Renewed scepticism about the Greek bailout deal and worries over the looming US 'fiscal cliff' put pressure on sentiment. The S&P/ASX 200 fell 9.5 points (0.21%) to 4447.3 and the All Ordinaries slipped 10.8 points (0.24%) to 4462.6 as investors rotated away from the resources sector into defensive stocks.
Why were defensive stocks in favour and what does that mean for everyday investors?
With the resources sector weakening, investors focused on companies with less volatile earnings — so-called defensive stocks. For everyday investors, that means more interest in stable earners like telecommunications and healthcare during periods of market uncertainty.
How did major miners perform and which mining stocks fell the most?
The big miners all posted losses. BHP Billiton finished lower at about $34, Rio Tinto fell $1.08 to $56.70, and Fortescue slumped to $3.80, reflecting the broader weakness in the resources sector described in the article.
What happened to major Australian banks during the session?
Bank results were mixed: NAB rose to $23.88, ANZ increased to $23.82, Westpac added to $25.03, while Commonwealth Bank eased to $58.98, showing some bank stocks outperformed as investors sought relative stability.
How did Telstra and CSL perform in the market update?
Telstra closed higher at $4.33, while healthcare company CSL was up at $50.30 — both examples of defensive-style stocks that drew buying interest amid the market’s shift away from resources.
Did global risks like the US fiscal cliff and Greek bailout affect Australian markets?
Yes. Nervousness about US political negotiations to avoid automatic tax hikes and spending cuts (the 'fiscal cliff') and renewed doubts over the Greek bailout weighed on sentiment and influenced market movements, including taking cues from a weaker night on Wall Street.
What moved the currency and bond markets during this period?
The Australian dollar eased slightly to around US104.46 cents from US104.80 amid fiscal‑cliff concerns. Bond futures prices rose strongly — the December 10‑year contract was around 96.865 (implying a yield near 3.14%) — as investors sought safer assets.
Are markets expecting an RBA rate move after this session?
Markets were pricing roughly a 50‑50 chance that the Reserve Bank of Australia (RBA) would ease rates when it met the following Tuesday, reflecting uncertainty and sensitivity to upcoming economic data.
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