The Australian sharemarket has closed slightly lower as fears that Spain may be headed for a financial bailout overshadowed lower-than-expected inflation figures in Australia.
At 1615 AEST on Wednesday, the benchmark S&P/ASX200 index had fallen 9.3 points, or 0.23 per cent, to 4,123.9 points, while the broader All Ordinaries index was down 9.8 points, or 0.24 per cent, at 4,151.4 points.
On the ASX 24, the September share price index futures contract was five points weaker at 4,080 points, with 27,151 contracts traded, according to preliminary calculations.
CMC Markets chief market analyst Ric Spooner said investors were worried that a surge in Spain’s borrowing costs to above seven per cent would be unaffordable for the debt-laden country if they stayed at that level.
“The bottom line is it’s very difficult to aggressively reposition yourself into risk assets and equities while Spanish bond rates are where they are,” Mr Spooner said.
“The Spanish government is now being obliged to pay a borrowing cost that it won’t be able to sustain over the medium term.
“The reason bond rates are up there is that creditors are becoming increasingly concerned about the strains being placed on the Spanish government by the need to bolster or potentially bolster the regional governments (in Spain).”
The release of lower-than-expected inflation figures in Australia did little to encourage investors.
The Australian Bureau of Statistics figures showed Australia’s consumer price index (CPI) rose 0.5 per cent in the June quarter, for an annual rate of 1.2 per cent.
It was expected to rise by 0.6 per cent in the June quarter for an annual rate of 1.3 per cent.
In the resources sector, global miner BHP Billiton reversed eight cents to $30.85, and Rio Tinto lost 75 cents to $51.01.
OZ Minerals dumped 10 cents to $7.43 after announcing its copper and gold production was lower in the June quarter compared to the previous three months.
Atlas Iron sagged 6.5 cents to $1.685 despite saying it was on track to double production by the end of the year.
Sundance Energy dipped five cents to 45 cents as it recorded net production of 43,170 barrels of oil equivalent (BOE) for June in the United States, a drop compared to its May results.
Among the major banks, Westpac declined 17 cents to $22.45, ANZ lost 11 cents at $22.64, National Australia Bank improved 16 cents to $23.82, and Commonwealth Bank lifted eight cents to $54.86.
Macquarie Group fell 43 cents to $23.87 despite saying it expects an improved result for the 2013 financial year.
Among other stocks, Hastings Diversified Utilities Fund firmed six cents to $2.54 after APA Group increased its takeover offer for Hastings.
Preliminary national turnover was 1.19 billion securities worth $3.4 billion, with 543 stocks down, 334 up and 350 unchanged.
