Australian shares are weaker as concerns about US Federal Reserve bond buying dents sentiment, with banking and mining stocks both in negative territory.
RBS Morgans Ipswich manager Tony Russell said speculation about the American central bank’s quantitative easing policy, ahead of its meeting this week, was causing the Australian market to follow Wall Street’s weak lead.
“That’s what the short-term nervousness is,” he told AAP.
Banking stocks are also off, following construction giant Lend Lease’s announcement it would merge its Australian construction and infrastructure businesses.
“Lend Lease came out with a market downgrade – that doesn’t help the sentiment this morning,” Mr Russell said.
Lend Lease opened Monday’s trading session 72 cents, or 7.7 per cent lower, at $8.64.
Subsequently, Commonwealth Bank shed 40 cents to $66.68, Westpac lost 33 cents to $28.61, ANZ relinquished 15 cents to $27.64, as National Australia Bank gave up 9 cents to $29.29.
Still, Mr Russell said the banks’ slide had more to do with profit taking, following a recovery at the end of last week.
The big miners are also weaker, with BHP Billiton shedding 48 cents to $32.43 and Rio Tinto losing $1.07 to $52.91, following a drop in commodity prices.
“There’s some news coming out of China that they might be looking to try and do something about their overcapacity in the various aluminium, iron ore, coal sectors there,” Mr Russell said.
On Wall Street, the Dow Jones Industrial Average shed 0.7 per cent while the broad-based S&P 500 lost 0.59 per cent.
KEY FACTS
* At 1030 AEST on Monday, the benchmark S&P/ASX200 index was 44.1 points, or 0.92 per cent, lower at 4,747.7.
* The broader All Ordinaries index was down 43.7 points, or 0.92 per cent, at 4,731.8.
* The June share price index futures contract was 41 points lower at 4,744, with 13,610 contracts traded.
* National turnover was 293.7 million securities worth $680 million.
AAP
