Miners feel pinch on developing markets
The benchmark S&P/ASX 200 Index was down 34.3 points, or 0.67 per cent, at 5078.2 points. The broader All Ordinaries Index was 33.5 points lower, or 0.66 per cent, at 5068.8 points.
The top 20 developing nation currencies have tumbled against the US dollar, as financial markets expect the US Federal Reserve to taper its mass bond buying stimulus measures from September.
The 0.7 per cent fall in the Australian market on Tuesday occurred as the India rupee hit an all-time low against the greenback and Japan's Nikkei lost 2.6 per cent.
IG markets strategist Chris Weston said a sharp rise in US Treasury bond yields was squeezing demand for assets in developing markets. "It's a story of emerging market weakness, basically," he said. "The move we've seen in the developed market bond market is killing the emerging market trade right now: places like India, Malaysia, Indonesia, Brazil; all their currencies are getting absolutely smashed."
The big resource companies were affected, with BHP Billiton losing 50¢ to $36.54 as Rio Tinto ditched 63¢ to $59.51.
After the local market closed, BHP announced a 29.5 per cent fall in full-year net profit to $US10.9 billion ($12.03 billion).
The big four banks had mixed fortunes, with National Australia Bank gaining 21¢ to $31.57 after posting a $1.7 billion net profit for the three months to June.
ANZ was also up, adding 1¢ at $29.56, but Commonwealth Bank was down 88¢ at $70.27, and Westpac shed 43¢ at $31.14.
Investors appeared to overlook minutes from the Reserve Bank's August meeting, where members agreed the possibility of closing off more rate cuts should be considered.
Meanwhile, QBE Insurance Group shares lost 93¢, or 5.46 per cent, to $16.10 after posting a 37 per cent fall in half-year net profit to $US477 million ($526.29 million), following a fall in demand for US mortgage insurance.
National turnover was 1.7 billion securities worth $4.3 billion.
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The ASX fell about 0.7% as investor concerns about emerging markets hit resource stocks. Developing-nation currencies tumbled against the US dollar amid expectations the US Federal Reserve will taper bond-buying from September, and a sharp rise in US Treasury yields squeezed demand for emerging-market assets.
Big resource companies were hit: BHP Billiton fell 50 cents to $36.54 and Rio Tinto dropped 63 cents to $59.51, reflecting the broader sell-off on worries about developing markets and currency weakness.
After the market close BHP announced a 29.5% fall in full-year net profit to US$10.9 billion (A$12.03 billion), as reported in the article.
The big four had mixed results: National Australia Bank gained 21 cents to $31.57 after reporting a $1.7 billion net profit for the three months to June; ANZ rose 1 cent to $29.56; Commonwealth Bank fell 88 cents to $70.27; and Westpac shed 43 cents to $31.14.
QBE shares lost 93 cents, or 5.46%, to $16.10 after the company reported a 37% fall in half-year net profit to US$477 million (A$526.29 million), driven by a fall in demand for US mortgage insurance.
The top 20 developing-nation currencies tumbled against the US dollar, with the India rupee hitting an all-time low. That currency weakness, combined with rising US yields, reduced investor appetite for assets in countries such as India, Malaysia, Indonesia and Brazil, contributing to the market slide.
Investors appeared to largely overlook the RBA minutes; the minutes noted members agreed the possibility of closing off more rate cuts should be considered, but that did not dominate market moves compared with emerging-market pressures.
National turnover was 1.7 billion securities worth about $4.3 billion, indicating a busy trading day despite the downward pressure on prices.
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