Profit-taking in the big banks dragged the Australian sharemarket lower on Thursday, spurred by the steepest losses on Wall Street in a month.

The S&P/ASX 200 Index fell 0.5 per cent, or 38.1 points to 8348.7 at the market close, almost erasing the previous session’s gains. Ten of 11 sectors finished in negative territory, with technology leading losses. The All Ordinaries fell 0.5 per cent.

On Wall Street, risk appetite plunged, sending the S&P 500 tumbling 1.6 per cent after a lacklustre $US16 billion ($24.8 billion) sale of 20-year bonds spurred a sharp rise in Treasury yields, raising concerns about US assets.

The soft demand came just days after credit ratings agency Moody’s downgraded US Treasuries, as US President Donald Trump’s proposed tax and spending bill heaped more pressure on the bond market. Gold prices climbed for a fourth day as investors retreated from US assets, retaking $US3300 an ounce.

‘Taking a breather’

Anthony Golowenko, a portfolio manager at MLC Asset Management, said Wall Street’s plunge had prompted Australian shares to “take a breather” from their rebound since early April. The ASX 200 is just over 2 per cent short of an all-time high forged in February.

“Some of the technology names we hold have had an incredibly strong few weeks, hitting well beyond double-digit returns,” he said. “That’s a significant move in a short space of time, so the market is taking a breather and consolidating at these levels.”

Australian banks were heavily sold after Wednesday’s rally that pushed Commonwealth Bank to a new intraday high. CBA retreated 1.3 per cent to $172.72, while Macquarie was off 2.2 per cent to $205.54.

Growth-oriented technology and consumer discretionary stocks also sold off. The ASX 200’s technology sector was a sea of red with heavyweight WiseTech down 2.3 per cent to $98.74. Aristocrat Leisure retreated 2 per cent to $60.57 and Wesfarmers 1.2 per cent, to $83.09, after warning of worse-than-expected losses from its lithium business.

Gold stocks were a sea of green, tracking higher prices. Northern Star Resources jumped 5.4 per cent to $20.25 and Newmont 2.3 per cent to $82.98.

Rio Tinto slipped 0.6 per cent before the company announced after the market closed that chief executive Jakob Stausholm will step down later this year.

Stocks in focus

In corporate news, Insurance Australia Group added 2.7 per cent to $8.75 after the ACCC waved through its takeover bid for RACQ Insurance.

Lynas Rare Earths advanced 7 per cent to $8.13 after Morgan Stanley hit the stock with a double upgrade because it expects Lynas to be among critical minerals miners that will benefit from growing demand for humanoids – AI-driven robots modelled on the human form.

Zip Co slumped 6.5 per cent to $1.87 after Swedish fintech peer Klarna warned this week that more customers were having trouble repaying their loans from flexible payment options such as buy now, pay later.

Mayne Pharma dropped a further 4.4 per cent to $4.35 after Wednesday’s more than 30 per cent loss, following an ASX query why a reprimand from US regulators did not require market disclosure.

SKS Technologies leapt 21.24 per cent to $1.86 after construction company Erilyan Group granted it a $100 million contract for a major data centre project.