The Australian share market lost its early morning gains to close at its lowest level since July on concerns about future stimulus programs by central banks.
The benchmark S&P ASX/200 index closed 0.23 per cent lower on Tuesday, hitting its lowest level in two months after dropping more than two per cent on Monday.
CMC Markets chief market strategist Michael McCarthy said investors continued to be concerned about central bank stimulus policies, particularly after the release of better than expected data from China.
“The decline really started accelerating around mid-session after the release of Chinese data,” Mr McCarthy said on Tuesday..
“We saw better than expected retail sales and industrial production numbers, and that has raised concerns that the People’s Bank of China will also be stepping in back from its stimulus program.”
The European Central Bank had not moved to expand its stimulus program last week, and recent comments from the US Federal Reserve that have left investors “slightly more hawkish”, he said.
On the local market large volumes were also being traded with the September quarterly futures contract due to expire on Thursday. This hit the nation’s top 10 stocks on Tuesday, including the banks, Mr McCarthy said.
“That tells us that somebody was using those big liquid stocks as part of their strategy to roll over their futures,” he said.
Australia’s biggest bank, Commonwealth Bank, lead the financial sector’s falls, finishing 72 cents lower at $69.50.
ANZ fell 34 cents to $25.85, National Australia Bank fell 35 cents to $26.25 and Westpac fell 33 cents to $28.70.
Telecom giant Telstra dropped five cents to $4.94.
Bucking the broader market were resource heavyweights, BHP Billiton and Rio Tinto, which rose six cents to $20.00 and five cents to $47.46, respectively.
Energy giant Woodside Petroleum closed flat at $27.57, but Origin Energy, Santos and Oil Search fell nearly two per cent.
Fortescue Metals shares rose four cents to $4.74 after the iron ore exporter said it will repay $US700 milion ($A925 million) of its debt, generating annual interest savings of about $US26 million.
Ratings agency Standard & Poor’s said Fortescue’s “material” debt repayment supports its resilience against low iron ore prices.
KEY FACTS:
* The benchmark S&P/ASX 200 index was down 11.8 points, or 0.23 per cent, at 5,207.8 points.
* The broader All Ordinaries index was down 9.1 points, or 0.17 per cent, at 5,310.0 points.
* The September share price index futures contract was down seven points at 5,194 points, with 43,498 contracts traded.
* National turnover was 2.44 billion securities traded, worth $6.79 billion.
