The Australian share market has closed lower, weighed down by weaker resources stocks, as investors ponder more potential interest rate hikes in the US in 2017 than had been expected.
Atlantic Pacific Securities client adviser Gary Huxtable said volumes traded on Friday had been pretty low, especially in the bigger stocks.
He said sentiment on the local bourse was being dominated by the the US Federal Reserve’s signal this week that in 2017 there may be three interest rate hikes rather than the two that markets had expected.
Mr Huxtable said higher interest rates, a stronger US dollar and high levels of US dollar-denominated debt in emerging nations were not supportive for equity markets.
“The Fed’s dominated investors’ minds,” Mr Huxtable said.
Mr Huxtable said gold miners had come under a lot of pressure on Friday because they preferred a low interest rate environment.
In the resources sector, global miner BHP Billiton fell 33 cents to $25.00, and Rio Tinto was down 80 cents to $59.29.
Fortescue Metals nudged up one cent to $6.30 after it announced it would soon repay a further $US1 billion of debt.
Gold miners lost ground as the gold price fell. Newcrest slumped 83 cents, or 4.72 per cent, to $16.75, Northern Star sagged 23 cents, or 7.17 per cent, to $2.98, and Evolution Mining backtracked 14.5 cents, or 8.26 per cent, to $1.61.
The major banks were mixed. Commonwealth Bank rose 42 cents to $81.06, ANZ eased 18 cents to $29.81, Westpac retreated seven cents to $32.19, and National Australia Bank found six cents at $29.97.
Among other stocks, Mayne Pharma plunged after it said multiple US states had started legal proceedings against it and several other drug makers over alleged anti-competitive conduct in the US.
Mayne shares dropped below $1.08 in trading before closing down 12.5 cents – an 8.8 per cent fall – at $1.30.
Casinos operator Crown Resorts improved 12 cents to $11.49. Crown is increasing the scale of the special distribution and buyback that will follow the reduction of its stake in its Macau joint-venture.
Beleagured surfwear retailer SurfStitch gained two cents to 18.5 cents. SurfStitch has sold a subsidiary that makes surfboards and surfing equipment to investment group Gowing Bros for $17 million as part of a strategy to refocus on its online retail activities.