Stocks dip as US rate rise firms

The sharemarket was weaker at noon as a drop in oil prices took its toll on energy producers.

 

The Australian share market is weaker as a drop in oil prices hits energy producers.

The benchmark S & P/ASX 200 index was down 0.51 per cent at 5,446.6 points at noon (AEDT), with most sectors in the red.

The broader All Ordinaries index was down 25.8 points, or 0.46 per cent, at 5,529 points.

CMC Markets chief market strategist Michael McCarthy said earlier that strength in the US dollar was weighing on commodities and global equities as market eyes focus on the US Federal Reserve.

“The US dollar is firmer after FOMC minutes were confirmed hawkish,” he said.

“Weakness in oil and metals markets could further sour sentiment.”

Mr McCarthy noted there was now an 80 per cent chance of a US hike in December, according to futures markets, with an upward move “assured at current economic settings”.

Despite this, the ASX could get a boost if the local currency continues to trend down.

“Support for local shares may come from international investors as a lower Australian dollar adds appeal,” Mr McCarthy said.

Oil prices fell one per cent overnight after OPEC reported its September oil output hit eight year highs.

Oil Search had dropped 2.5 per cent to $7.31, Santos had slipped 2.6 per cent to $3.74 and Woodside Petroleum was down 1.1 per cent at $29.63. BHP Billiton had fallen 1.9 per cent to $22.99, and Rio Tinto was 2.05 per cent weaker at $51.91.

Among other major stocks, CSL had shed 1.5 per cent to $104.95 and Telstra was down 1.3 per cent at $5.035.

The big four banks were also lower, with Westpac the worst performer, down 1.1 per cent at $30.49.

Gold miners were among the better performers, with Newcrest Mining, Evolution Mining and Northern Star all more than one per cent stronger.

With AAP