The share market has fallen nearly two per cent, with a rapidly rising Australian dollar and profit taking by Japan-based foreign investors believed to be responsible.
It was the Australian dollar’s rise in the last fortnight against both the Japanese Yen, from Y91 to Y95, and US dollar from 76 to 80 US cents prompting the moves, said CMC Markets chief market strategist Michael McCarthy.
Japanese investors are among the biggest foreign investors on the Australian share market.
“It has been interesting to watch our market moving as the Yen moves and as the Aussie-Yen cross moves,” he told AAP.
“Even though they probably haven’t made much on the share side of things a four to five per cent gain in two weeks on currency moves is a very good deal for an international fund manger.”
Reduced expectations of a Reserve Bank of Australia rate cut next week also weighed on the banks.
Commonwealth Bank dropped $2.01, or 2.2 per cent, to $90.57, ANZ fell 66 cents, or 1.9 per cent, to $34.75, Westpac lost 99 cents, or 2.6 per cent, to $37.40 and National Australia Bank gave up 92 cents, or 2.4 per cent, to $37.46.
A stronger Australian dollar was a negative for some healthcare stocks, such as CSL, which shed $2.73, or 2.9 per cent, to $91 and condom and glove maker Ansell, which dived $1.33, or 4.9 per cent, to $26.10.
BHP Billiton was 38 cents lower at $32.04, Rio Tinto lost $1.08 to $57.71 while Fortescue Metals slumped 18 cents, or 7.4 per cent, to $2.27 despite iron ore prices continuing to recover.
KEY FACTS
* At the close on Wednesday, the benchmark S&P/ASX200 index was 109.9 points, or 1.9 per cent, lower at 5,883.6.
* The broader All Ordinaries index was down 103.3 points, or 1.7 per cent, at 5,818.2.
* The June share price index futures contract was 99 points lower at 5,827, with 38,702 contracts traded.
* The price of gold in Sydney at 1700 AEST was $US1,200.80 per fine ounce, up $US9.20 from $US1,200.80 on Tuesday.
* National turnover was 1.6 billion securities worth $5.4 billion.
