The Australian share market is trading lower as investors continue to grapple with the Reserve Bank of Australia’s position on interest rates.
OptionsXpress market analyst Ben Le Brun said although commodity prices lifted overnight and boosted the resources sector, it was not enough to save the market from further falls in the wake of Tuesday’s steep sell-off.
Mr Le Brun said the fact that the Reserve Bank of Australia had not provided any forward guidance when it decided on Tuesday to maintain interest rates as they are, had disappointed investors.
“It looks like the market was really disappointed by the lack of guidance, and that we were expecting an easing bias from the RBA,” Mr Le Brun said.
“When we didn’t get one, we saw an acceleration in terms of selling in high-yield stocks yesterday, and it’s carried through today.”
Mr Le Brun said GDP (gross domestic product) figures released on Wednesday had not had a great impact on the market.
Australia’s economy grew by 0.9 per cent in the March quarter and by 2.3 per cent over 12 months to March, official figures show.
Among the banks at 1200 AEST, Commonwealth Bank had shed 97 cents to $82.03, ANZ dipped 27 cents to $32.03, Westpac surrendered 36 cents to $31.98, and National Australia Bank retreated 34 cents to $33.01.
In the resources sector, global miner BHP Billiton was up 22 cents at $28.55, Rio Tinto added $1.20 to $57.69, and Fortescue Metals was six cents richer at $2.44.
Oil and gas producer Woodside Petroleum was 23 cents weaker at $35.88, but Santos put on seven cents at $8.15.
Food manufacturer Patties Foods lifted one cent to $1.21 as the company confirmed that its earnings had taken a significant hit from the recall of its Nanna’s frozen berry products earlier this year due to a hepatitis A scare.
KEY FACTS
* At 1209 AEST on Wednesday, the benchmark S&P/ASX200 index was down 50.2 points, or 0.89 per cent, at 5,585.8 points.
* The broader All Ordinaries index was down 47.8 points, or 0.85 per cent, at 5,592.1 points.
* The June share price index futures contract was three points lower at 5,587 points, with 20,253 contracts traded.
* National turnover was 798.2 million securities worth $2.0 billion.
