Ore slump drags market to lowest point in weeks
The market closed at its lowest level for six weeks on Thursday, dragged down by a dive in the iron ore price that hit the big miners.
At the close, the benchmark S&P/ASX 200 Index was down 44 points, or 0.88 per cent, at 4930.7, while the broader All Ordinaries fell 42.1 points, or 0.85 per cent, to 4917.1.
It wasn't the only bad news around, with the Organisation for Economic Co-operation and Development overnight downgrading Australia's economic prospects after the mining boom.
"We seem to be just coming under a hell of a lot of pressure with the OECD downgrades playing a part, global growth as well as Chinese growth not looking so great," said CMC Markets trader Ben Taylor.
"I think people are little bit risk-averse, selling first and asking questions later."
The big iron ore miners were all lower, after the price of the commodity fell to seven-month lows of $US112.90 a tonne.
BHP Billiton shed 1.2 per cent to $34.46, Rio Tinto was down 1.4 per cent at $53.96 and higher-cost producer Fortescue Metals dived 5.1 per cent to $3.35.
Banking stocks were mixed, with National Australia Bank down after going ex-dividend, losing $1.23, or 4 per cent, to $29.32. ANZ was 7¢ weaker at $27.53, Westpac was up 14¢ at $28.86 and Commonwealth Bank lifted 72¢, or 1.1 per cent, to $67.61.
Seven Group Holdings was down 17¢, or 2.2 per cent, at $7.43 after former Woodside boss Don Voelte was named as its new chief executive. He was previously in charge of publishing and broadcasting company Seven West Media, in which Seven Group holds a major stake.
Meanwhile, the dollar bounced more than a cent higher, helped by a positive reaction to key business investment figures.
Late on Thursday, the dollar was trading at US96.73¢, up from US95.51¢ on Wednesday.
Commonwealth Bank currency strategist Peter Dragicevich said the dollar gained ground overnight due to weakness in its US counterpart. "The US dollar weakened against most major currencies, so that has helped the Aussie," he said.
The dollar also bounced higher on capital expenditure data that showed business spending plans were holding up well for next year even though there had been a drop in the March quarter.
Mr Dragicevich said the figures meant that it was less likely the Reserve Bank would cut the cash rate again in the next few months and this helped boost demand for the dollar.