Investor caution sends share market lower

Petrina Berry
(Australian Associated Press)

 

The share market has lost ground as investors tread cautiously ahead of a speech by US President Donald Trump that is expected to detail his plans for tax cuts and reform.

The benchmark S&P/ASX200 stock index dropped 0.1 per cent to 5,664.3 points, as weakness in the financial and telco sectors offset gains by miners and some energy producers.

Investor activity was low ahead of President Trump’s speech on Wednesday night, Australian time, OptionsXpress market analyst Ben Le Brun said.

“The market is hoping for a tax plan and perhaps some numbers out of Donald Trump’s speech,” Mr Len Brun said.

“Traders and investors are sitting on their hands, waiting to see how the cards fall.”

Telstra continues to be hit by concerns about where it can grow its business amid stiff competition, dropping 1.4 per cent to $3.48, its lowest level in almost five-and-a-half years.

QBE Insurance was the worst performer in the financial sector, down 2.8 per cent at $9.92, while the big four banks were relatively steady, with Commonwealth the weakest, down 0.3 per cent at $74.85.

Energy shares were mixed despite oil prices slipping, with Woodside down 0.4 per cent at $29.85 and Santos 0.7 per cent weaker at $4.14, while Oil Search gained 0.9 per cent to $7.11 and Origin Energy added 0.8 per cent to $7.45.

Major east coast gas exporters agreed on Wednesday to a two-year supply deal to ensure no shortfall of gas in the domestic market, after talks with the federal government.

Iron ore miner Fortescue Metals jumped 3.4 per cent to $5.20, Rio Tinto gained 1.4 per cent to $66.80 and BHP Billiton edged 0.2 per cent higher to $25.83.

The Australian dollar fell to 78.56 US cents in the local trading session, its lowest level in six weeks, as the greenback rose after US Federal Reserve Chair Janet Yellen boosted expectations of a December rate hike in the US.

ON THE ASX:

* The benchmark S&P/ASX200 was down 6.7 points, or 0.12 per cent, at 5,664.3 points.

* The broader All Ordinaries index was down 4.1 points, or 0.07 per cent, at 5,725.5 points.

* The SPI200 futures contract was down 12 points, or 0.21 per cent, at 5,647 points.

* National turnover was 3 billion securities traded worth $5.2 billion.

CURRENCY SNAPSHOT AT 1700 AEST:

One Australian dollar buys:

* 78.56 US cents, from 79.31 US cents on Tuesday

* 88.50 Japanese yen, from 88.51 yen

* 66.81 euro cents, from 66.95 euro cents

* 58.72 British pence, from 58.69 pence

* 109.37 NZ cents, from 109.65 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,291.94 per fine ounce, from $US1,308.94 per fine ounce on Tuesday

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 2.0319pct, from 2.0297pct on Tuesday

* CGS 4.75pct April 2027, 2.7375pct, from 2.7221pct

Sydney Futures Exchange prices:

* December 2017 10-year bond futures contract at 97.185 (implying a yield of 2.815pct), from 97.2 (2.8pct) on Tuesday

* December 2017 3-year bond futures contract at 97.83 (2.17pct), unchanged.

(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)

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