The share market has retreated from promising early gains to close only marginally higher as investors continued to sell stocks in some of the big banks.
Investors are still concerned about the debt provisions and bad loans of the major banks, IG chief market strategist Chris Weston said, whether or not those concerns were warranted.
“Sentiment towards the banks is pretty shot at the moment,” Mr Weston said.
“The trend is down, and I wouldn’t be surprised if there is further downside.”
Mr Weston said concerns about the strength of the global economy may also be weighing on investors.
US Federal Reserve Chair Janet Yellen has said the central bank should proceed “cautiously” on raising interest rates given uncertainty over China and low oil prices.
Those comments weakened expectations of further interest rate rises in the US this year, which helped boost the US share market, but Mr Weston said local investors may be considering the comments differently.
“She has been dovish, but she may be dovish because she is quite concerned about the global economy,” Mr Weston said of the Fed Chair.
“I don’t think her comments are that positive.”
Among the major banks, ANZ dropped nine cents to $23.11, Westpac fell four cents to $29.89, while Commonwealth Bank gained 19 cents at $73.31, and National Australia Bank added two cents to $25.64.
In the resources sector, BHP Billiton dipped nine cents to $16.62, Rio Tinto lost 15 cents to $41.99 and Fortescue Metals put on three cents to $2.57.
Gold miner Newcrest jumped 47 cents to $16.79, and blood products and vaccines supplier CSL lifted $1.79 to $100.36.
Airline Virgin Australia descended 3.5 cents, or 9.3 per cent, to 34 cents after Air New Zealand said it was considering selling all or part of its 26 per cent stake.
Share market operator ASX gained 50 cents to $41.25 as the federal government said it was opening the doors to competition in the clearing of shares.
KEY FACTS:
* The benchmark S&P/ASX200 index gained 5.8 points, or 0.12 per cent to 5,010.3 points.
* The broader All Ordinaries index added 5.3 points, or 0.1 per cent, to 5,081.5 points.
* On the ASX 24, the June share price index futures contract was flat at 4,993 points, with 28,823 contracts traded.
* The price of gold in Sydney at 1700 AEDT was $US1,237.10 per fine ounce, up $US19.10 on Tuesday’s price of $US1,218.00.
* National turnover was 2.3 billion securities traded, worth $5 billion.
