Stocks tick lower amid choppy trade after Fed hike

The ASX has ticked lower after the US central bank’s decision to hike rates weighed on Wall Street and buoyed the local dollar.

A pedestrian is reflected against the indicator board at the Australian Stock Exchange in Sydney. (AAP Image/Mick Tsikas)

The local sharemarket ended the session slightly lower on the back of weak offshore leads, after the US Federal Reserve hiked interest rates 25 basis points.

At the close of trade, the benchmark S&P/ASX200 had dipped 13.07 points, or 0.22 per cent, to 5,937.2 points, while the broader All Ordinaries index slipped 9.88 points, or 0.16 per cent, to 6,043.2 points.

Morgans private client adviser Chris Macdonald described the losses in response to the US rate decision, both locally and on Wall Street, as modest.

“The market was relieved that they only expect three interest rate rises this year, hence the muted response,” he said.

“We saw quite a sharp fall in the US dollar, which flowed through to commodity prices.

“Fortunately, we haven’t seen a wild swing in the markets, which is a good thing. In the short term, it will come down to the direction of the oil price, which has really been the major mover of markets in the last week.”

BHP gained 2.7 per cent to $29.70, while Rio Tinto put on 2.06 per cent to $76.78. Fortescue lifted 0.63 per cent to $4.79.

In financials, Commonwealth Bank lost 1.2 per cent to $74.87, while Westpac shed 0.67 to $29.60. ANZ lowered 0.42 per cent to $28.18 and NAB weakened 0.34 per cent to $29.46.

Insurer QBE, which has a large amount of interest bearing investments in the US, shot up 2.59 per cent to $9.90 on the back of the US interest rate decision.

The energy sector was one of the only sectors in the green after the price of oil rallied.

“Crude oil prices surged after US oil inventories unexpectedly fell last week,” said ANZ interest rate strategist Martin Whetton.

“Gasoline inventories tumbled for the third straight week to the lowest level since late January. EIA data showed that refinery utilisation rose for the third week running. The fall in both crude oil and product inventories suggests that demand in the US remains strong.

“Reports that OPEC and its allies are discussing ways of changing how they gauge the success of their production cuts also supported prices.”

Oil Search strengthened 0.42 per cent to $7.23, while Santos gained 1.18 per cent to $5.13. Origin Energy rose 0.44 per cent to $9.19 and Woodside Petroleum put on 2.22 per cent to $29.44.

Gold miners were mixed as the price of gold found support after the US Federal Reserve hinted at a gradual rise in interest rates.

Evolution Mining was unchanged at $3.04, while Resolute Mining lifted 1.65 per cent to $1.23. Newcrest strengthened 1.44 per cent to $19.67 and Northern Star edged up 0.15 per cent to $6.71.

Elsewhere, pharmaceutical wholesaler Sigma Healthcare plunged 7.39 per cent to 81 cents, despite delivering a full-year profit boost.

Construction materials company Brickworks jumped 2.84 per cent to $15.91 after it delivered a drop in first-half net profit.

Washington H Soul Pattinsons rose 2.57 per cent to $17.94 after it booked a 1.9 per cent fall in first-half profit compared to the first half last year, when the company benefited from one-off profit gains.

The Australian dollar was trading slightly lower at US77.45c in late trade after spiking on news of the Fed’s rate hike.