Weak US economic growth and reduced expectations of a local interest rate cut are weighing on the Australian share market.
The major banks are feeling the most pain as the market backs away from previous bets that the Reserve Bank of Australia would cut the cash rate on Tuesday, Bell Direct equities analyst Julia Lee said.
“Once again we are seeing heavy losses among the banks and what’s driving that is where the Aussie dollar is and interest rate expectations,” she said.
“The market had priced in an 80 per cent chance of a rate cut next week and now it’s about 50 per cent.
“The US gross domestic product numbers were absolutely dismal, and that’s having an impact on the market as well.”
Official data released overnight shows that the US economy grew just 0.2 per cent in the first quarter.
This drove Wall Street and European markets down overnight and led to a weak opening for the local bourse.
At noon AEST, Commonwealth Bank had shed $2.02, or 2.23 per cent, to $88.55, ANZ had dropped 76 cents, or 2.19 per cent, to $33.99, Westpac had lost $1.085 cents, or 2.9 per cent, to $36.315 and National Australia Bank was down 82 cents, or 2.19 per cent, at $36.64.
Ten Network has made a $264.4 million net loss for the six months to the end of February, 33 times the size of the $8 million loss a year ago.
Shares in the broadcaster was up 1.22 per cent, or 0.25 cents, at 20.75 cents because the result had beaten expectations.
TPG Telecom was down 13 cents, or 1.44 per cent, at $8.88 after iiNet gave it until Tuesday to up its $1.4 billion takeover offer following a $1.6 billion rival bid from M2.
As for the miners, BHP Billiton was flat at $32.04, Rio Tinto had lost 93 cents to $56.78 and Fortescue Metals had given up 18 cents, or 7.93 per cent, to $2.09 after iron ore prices shed recent gains.
KEY FACTS
* At 1200 on Thursday, the benchmark S&P/ASX200 index was 68.9 points, or 1.18 per cent, lower at 5,769.7.
* The broader All Ordinaries index was down 64.8 points, or 1.11 per cent, at 5,753.4.
* The June share price index futures contract was 78 points lower at 5,749, with 24,202 contracts traded.
* National turnover was 664 million securities worth $2.18 billion.
