Strong US leads ignored as resource and energy stocks head downwards
The benchmark S&P/ASX 200 Index fell 24.1 points, or 0.5 per cent, to 5332.9, as gains in the big four banks were not enough to buoy the market. The All Ordinaries lost 25.7 points, or 0.5 per cent, to 5324.9.
The market ignored strong leads from the US, where the Nasdaq closed above 4000 points for the first time, after official data showed the housing market is recovering more strongly than expected. But the exuberance in the US was tempered by an unexpected fall in the consumer confidence index.
Some analysts have noted that the better than expected US housing data could encourage the Federal Reserve to bring forward plans to start trimming stimulus programs.
"A December taper would shock the market, but we don't expect the Fed to start winding back asset purchases until the September quarter of 2014," Australian Ethical domestic equities manager Andy Gracey said.
"Overall, there are only muted signs of growth in US ... the rate of GDP growth in Australia appears to be slowing."
Materials was the worst-performing sector, down 1.4 per cent, after the spot price of iron ore fell 0.4 per cent to $US135.90 a tonne. BHP Billiton lost 1.5 per cent to $37.25, while Rio Tinto dropped 1.1 per cent to $64.30.
Gold stocks were mostly lower despite a 0.3 per cent rise in the gold spot price to $US1245.93. Australia's biggest goldminer, Newcrest Mining, fell 4.1 per cent to $7.77, while junior goldminer Silver Lake Resources was the worst-performing stock, dropping 14 per cent to 7.5¢.
Energy stocks were mostly lower despite the Brent crude oil price rising 0.1 per cent to $110.97. Woodside Petroleum fell 0.4 per cent to $38.24.
Australian Bureau of Statistics data showed that on a seasonally adjusted basis, construction work in the September quarter rose 2.7 per cent, beating expectations for a decline of around 1 per cent.
CBA added 0.6 per cent to $77.30. Westpac edged up 1¢ to $32.77. NAB added 0.3 per cent to $34.49, and ANZ rose 0.4 per cent to $32.08.
Frequently Asked Questions about this Article…
The Australian share market fell due to sharp losses in resource and energy stocks, which outweighed the positive influence of strong US market leads.
The S&P/ASX 200 Index fell by 24.1 points, or 0.5%, closing at 5332.9, mainly due to declines in resource and energy stocks.
Falling commodity prices led to significant losses in resource stocks, with the materials sector being the worst performer, down 1.4%.
Major Australian banks saw gains, with CBA adding 0.6%, Westpac edging up slightly, NAB increasing by 0.3%, and ANZ rising by 0.4%.
Gold stocks mostly fell despite a 0.3% rise in the gold spot price, with Newcrest Mining dropping 4.1% and Silver Lake Resources falling 14%.
No, energy stocks were mostly lower despite a 0.1% rise in Brent crude oil prices, with Woodside Petroleum falling 0.4%.
Some analysts suggest that better-than-expected US housing data might encourage the Federal Reserve to consider trimming stimulus programs sooner.
The Australian Bureau of Statistics reported a 2.7% rise in construction work for the September quarter, which was better than expected, but it wasn't enough to offset the overall market decline.
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