Australian shares are weaker after a US Federal Reserve official said tapering of economic stimulus could begin in October.
Resources and energy stocks were the worst performers on the market.
St Louis Fed president James Bullard’s comments weighed on investor sentiment, as it came only days after US Fed chairman Ben Bernanke had suggested quantitative easing would continue, Australian Stock Report senior equities analyst Benny Sada said.
“That really sowed some confusion among investors,” Mr Sada said.
“That uncertainty is really weighing on our market today.”
Uncertainty about a US Congressional deadlock on raising the debt ceiling is also hitting resources and gold stocks, following a poor performance on Wall Street on Friday.
BHP Billiton was down 26 cents to $36.13, Rio Tinto had shed 37 cents to $62.54, Fortescue had lost half a cent to $4.555 and gold miner Newcrest was down 88.5 cents, or 6.8 per cent, at $12.215.
But resource stocks may recover in afternoon trade after an HSBC Chinese purchasing managers’ index showed preliminary manufacturing activity at a six month high in September.
“It could play a part in arresting some of the decline in our mining sector,” Mr Sada said.
Also making news, Treasury Wine Estates’ chief executive David Dearie has resigned immediately, after just two years in the job.
The company’s shares have plunged 26 cents, or 5.5 per cent, to $4.49.
The big banks were mixed, with ANZ adding eight cents to $31.17, Westpac wadding 14 cents to $32.89, National Australia Bank was up 1.5 cents to $34.875, but Commonwealth Bank had shed 16 cents to $73.59.
KEY FACTS
* At 1220 AEST on Monday, the benchmark S&P/ASX200 index was down 23.2 points, or 0.44 per cent, at 5,253.5.
* The broader All Ordinaries index was down 24.8 points, or also 0.47 per cent, at 5,246.
* The December share price index futures contract was 13 points lower at 5,256, with 11,020 contracts traded.
* National turnover was 845.1 million securities worth $1.5 billion.
