Weakness in banks, industry cause drag
At the close on Tuesday, the benchmark S&P/ASX 200 Index was down 28.9 points, or 0.55 per cent, at 5180.1. The All Ordinaries fell 29.2 points, or 0.56 per cent, to 5156.2.
CMC Markets trader Ben Taylor said the market finished in negative territory after weak global leads. He said markets were anticipating that US Federal Reserve chairman Ben Bernanke would announce more quantitative easing in his speech to Congress on Wednesday.
"US equity markets eased from their record highs overnight, following falls on the dollar index as expectations that Bernanke will continue his QE mantra," he said. "Asian markets have followed suit, with selling pressure dominating in our banks and industrial sectors."
Despite strong support for commodity prices overnight, local miners had a mixed day. BHP Billiton gained 4¢ to $34.83 but Rio Tinto fell 12¢ to $55.30 and Fortescue lost 1¢ to $3.51.
Gold benefited from a weaker US dollar overnight, causing a resurgence for Newcrest Mining, which lifted $1.04 to $15.60.
Among the four big banks, ANZ dipped 59¢ to $29.64, Commonwealth Bank dropped $1.01 to $72.48, Westpac fell 31¢ to $31.48 and NAB lost 28¢ to $33.09.
The market moved higher after the Reserve Bank released the minutes of its May 7 board meeting where it cut the cash rate to a record low at 2.75 per cent.
In its minutes, the RBA forecast below-average economic growth for the remainder of 2013.
Seven West Media shares tumbled 8¢ to $2.28 as incoming boss Tim Worner pledged to focus on producing quality content while cutting costs.
Boart Longyear shares fell 0.5¢ to 78¢ after the mining services driller predicted earnings would fall in 2013 because resource companies were reducing exploration.
The dollar also benefited from the weaker greenback, rising from $US97.56¢ to $US98.17¢.
Nomura head of fixed income Jon Linton was looking forward to the release of Australian capital expenditure figures next week.
"The capex figures will be the key, because they will give us the clearest indication of what the Reserve Bank will do in terms of monetary policy," Mr Linton said.
Frequently Asked Questions about this Article…
The S&P/ASX 200 fell 28.9 points (0.55%) to 5,180.1, largely because weakness in the banks and industrial stocks dragged the market down. Traders also cited weak global leads and expectations that US Fed chairman Ben Bernanke might signal more quantitative easing, which weighed on sentiment.
The four major banks were weaker: ANZ dipped 59¢ to $29.64, Commonwealth Bank dropped $1.01 to $72.48, Westpac fell 31¢ to $31.48 and NAB lost 28¢ to $33.09. For everyday investors, softness in the big four was a key contributor to the broader market decline, highlighting how sensitive the ASX can be to bank sector moves.
Miners had a mixed session despite overnight support for commodity prices. BHP Billiton gained 4¢ to $34.83, Rio Tinto fell 12¢ to $55.30 and Fortescue lost 1¢ to $3.51. The mixed performance shows commodity price support doesn't always translate evenly across individual miners.
Gold benefited from a weaker US dollar overnight, and Newcrest Mining rallied $1.04 to $15.60. This reflects the typical inverse relationship between the US dollar and gold prices, which can boost gold miners when the dollar weakens.
The RBA minutes from its May 7 meeting confirmed the board cut the cash rate to a record low of 2.75% and forecast below-average economic growth for the remainder of 2013. The market moved higher after the minutes were released, although other global influences still left the overall session in negative territory.
Yes. CMC Markets trader Ben Taylor said markets were anticipating that Ben Bernanke would announce more QE in his congressional speech, and US equity markets eased from record highs. A weaker dollar index and selling pressure across Asian markets contributed to declines in Australian banks and industrials.
Nomura's head of fixed income Jon Linton noted capex figures will be key because they should give a clear indication of what the RBA might do with monetary policy. Investors often watch capex data closely as it signals business investment trends and can influence central bank decisions.
Yes. Seven West Media shares fell 8¢ to $2.28 after incoming boss Tim Worner said he would focus on producing quality content while cutting costs. Boart Longyear shares slipped 0.5¢ to 78¢ after the drilling services firm predicted earnings would fall in 2013 as resource companies reduced exploration.
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