Stocks dip as global sentiment wavers

Lower commodity prices and a soft Wall Street lead have taken a toll on the local market.

 

The Australian sharemarket has weakened at the open after commodity prices and Wall Street dipped overnight.

At the 10.15am (AEDT) official market open, the benchmark S&P/ASX 200 index weakened 26.9 points, or 0.49 per cent, to 5,457.1, while the broader All Ordinaries index gave back 28.1 points, or 0.5 per cent, to 5,541.8.

IG chief market strategist Chris Weston said investors were growing wary on the prospect of a shift in monetary policy in several key regions.

“We’ve been at an inflection point in financial markets for a few weeks now, with market participants sensing a changing tide among central banks,” he said.

“This change continues in earnest with reports the ECB are looking to taper, or wind back on its asset purchase program.

“The wash-up has been a slight pick-up in implied market volatility with some signs of risk aversion that needs to be watched closely.”

Precious metals were the hardest hit by the talk of ECB tapering, although the banks would be the focus through local trade as ANZ’s Shayne Elliott fronts a parliamentary inquiry.

“Gold stocks will predictably get smashed on open, but banks are key today given the moves higher in fixed income and some unwind of the hunt for yield trade,” Mr Weston said.

The big four banks were mixed, with ANZ mirroring CBA yesterday in underperforming as it faced public scrutiny.

ANZ lost 0.1 per cent, NAB was flat, CBA rebounded 0.2 per cent and Westpac added 0.5 per cent.

The resources sector was largely weaker given falls in base metals and a slowdown in momentum in oil prices.

In energy, Santos lost 0.7 per cent to $3.775, while Woodside skidded 1.2 per cent to $28.72.

In materials, BHP Billiton retreated 0.5 per cent to $22.79, Rio Tinto slipped 1.2 per cent to $51.83 and Fortescue slid 1.9 per cent to $4.805.

Gold stocks were punished after the precious metal stumbled 3 per cent in offshore deals, with local market leader Newcrest tumbling 6.6 per cent and Regis Resources diving 5.8 per cent.

Among other blue chips, Telstra gave back 0.8 per cent to $5.16, while Qantas edged down 0.2 per cent to $3.175.

Meanwhile, the Australian dollar continued its retreat, flirting with a fall below US76c after testing the US77c mark yesterday morning.