Slight downturn follows two days of gains

The sharemarket closed slightly weaker after investors sold defensive and high-yielding financial stocks, following a couple of days of gains.

At the close, the benchmark S&P/ASX 200 Index was down 8.8 points, or 0.18 per cent, at 4968.

The broader All Ordinaries Index was down 6.5 points, or 0.13 per cent, at 4973.7.

The June share price index futures contract was five points lower at 4964.

CommSec market analyst Steve Daghlian said Wednesday's falls were modest. "Thanks to yesterday's big gain, we are still up 1.5 per cent for the week," he said.

The market has not posted gains for a week or finished up two days in a row for five weeks.

Mr Daghlian said reasonably solid trade figures showing strong import demand in China might have prevented stronger losses. But that was balanced by a new report showing a surprising drop in consumer confidence this month.

Defensive stocks such as Woolworths and Wesfarmers, and some big banks, fared poorly, being viewed as of less value than the miners.

Wesfarmers finished 37¢ lower at $40.12 and Woolworths was 36¢ weaker at $33.89.

Among the banks, Westpac was down 37¢ to $30.93, ANZ 23¢ to $28.25, Commonwealth Bank 66¢ to $67.30 and National Australia Bank 21¢ to $31.20.

But improved commodity prices attracted investors to resource stocks. BHP Billiton was more than 1 per cent higher for a third consecutive day, ending 57¢ stronger at $33.68. Rio Tinto surged $1.55, or 2.7 per cent, to $58.28.

The dollar reached its highest level in more than two months, helped by the Chinese trade data.

At 5pm on Wednesday, it was at US105.09¢, up from Tuesday's local close of US104.24¢. It reached an intra-day peak of US105.19¢ on Wednesday afternoon, its highest since late January.

Westpac chief currency strategist Robert Rennie said the dollar received a boost after Chinese trade figures showed a rise in exports in March. It was also benefiting from rising demand for Australian government bonds because of Japan's stimulus efforts.

The Bank of Japan will buy ¥7 trillion of Japanese government bonds a month in an effort to lift inflation after decades of economic stagnation.