The Australian sharemarket fell for a second day as investors again shed resources stocks and banks slipped on interest rate speculation.
At close of trade the S&P/ASX 200 Index was down 39 points, or 0.7 per cent, to 5435.5, while the All Ordinaries fell 37 points, or 0.7 per cent, to 5518.3.
Resources names again bore the brunt of the sell-off, with BHP Billiton and Rio Tinto falling 2.9 per cent and 2.7 per cent, respectively. It came after Citi analysts joined fellow investment bank UBS on Wednesday in taking stock of the outperformance of the sector over the first three quarters of the year, downgrading BHP and Rio Tinto to sell.
“Market sentiment has definitely shifted over the last couple of days. As capital flows back into the US on the prospect of further interest rate hikes, this is having an inverse effect on commodity prices,” Atlantic Pacific Securities client adviser Gary Huxtable said.
“Australian miners will continue to experience strong headwinds as this continues.”
While the miners were sold, Bluescope Steel surged 6.2 per cent after steel futures in China pushed to a five-week high, with investors buoyed by the prospect of stockpiles rising after the week long Golden Week holiday.
The release overnight of the minutes of the US Federal Reserve’s September meeting minutes sent the US dollar to its highest level since March and Wall Street slightly lower. The minutes showed how close the call was to lift rates, which led investors to keep December as the likely date for the next rate hike.