The Australian share market has closed slightly lower as a sharp fall in iron ore prices weighed upon the big miners.
But investors bought into stocks that generate earnings in US dollars, such as Cochlear, Resmed, CSL and Westfield, on expectations that the US dollar will continue to rise in value on the back of encouraging economic data.
HC Securities senior client adviser Mark Lennox said the strong US dollar was affecting commodity prices, and a fall in the iron ore price was hurting the miners.
“It’s the same old story for commodities… demand is not as strong as people were expecting,” Mr Lennox said.
Iron ore, which had shown some resilience over recent weeks, dropped 3.5 per cent overnight to below $US60 a tonne.
But the strong US dollar benefitted some other stocks.
Mr Lennox said US housing data out on Tuesday was positive which drove up the US dollar and lifted expectations that interest rates in the US would rise before the end of the year.
“So any more positive data from the US is going to lead into a higher US dollar, and any stocks with US dollar exposure should pick up,” he said.
On the local bourse, global miner BHP Billiton surrendered 81 cents, or 2.73 per cent, to $28.82, Rio Tinto retreated $1.42, or 2.47 per cent, to $56.03, and iron ore pure play Fortescue Metals tumbled 15 cents, or 6.76 per cent, to $2.07.
Fortescue hopes its calls for an inquiry into the iron ore market will generate enough public pressure to force rivals BHP Billiton and Rio Tinto to rein in their expansion plans.
BHP offshoot South32 rose three cents to $2.36.
Among the major banks, ANZ lost 11 cents at $31.89, Commonwealth Bank shed 36 cents to $82.49, National Australia Bank weakened 11 cents to $33.56, and Westpac dipped two cents to $32.26.
Cochlear implants supplier Cochlear surged $5.22, or 6.6 per cent, to $84.37, and blood products and vaccines supplier CSL lifted $1.18 to $89.68.
KEY FACTS
* On Wednesday, the benchmark S&P/ASX200 index was down 5.2 points, or 0.09 per cent, at 5,610.3 points.
* The broader All Ordinaries index was down 5.4 points, or 0.1 per cent, at 5,614 points.
* The June share price index futures contract was 15 points lower at 5,605 points, with 36,263 contracts traded.
* The price of gold in Sydney at 1700 AEST was $1,205.30 per fine ounce, down $US15.98 from $US1,221.28 on Tuesday.
* National turnover was 1.7 billion securities worth $5.09 billion.
