A slump in consumer sentiment and fears commodity prices will continue to tumble have driven the Australian share market lower.
Political uncertainty in Greece spooked markets around the world overnight, setting a negative tone for the local share market.
Adding to investors’ woes was a surprisingly weak consumer sentiment report that led to a fall in retail stocks, CommSec market analyst Tom Piotrowski said.
The Westpac-Melbourne Institute measure of consumer sentiment released on Wednesday fell to its lowest level in three years.
“Sentiment surveys can be quite volatile but it’s difficult to ignore the substantial decline that we have seen in this survey,” Mr Piotrowski said.
He said the biggest drag on the market was the downward pressure commodity prices would face if the US economy continues to improve.
“The expectation that the US dollar is going to continue improving will put more downward pressure on commodity prices,” he said.
“If the US economy is improving, they’ll be one step closer to higher interest rates, but with slowing growth elsewhere this will likely cause commodity prices to fall, which is a negative for the Australian economy.”
Among the major banks, Westpac was down 54 cents at $32.52, ANZ had shed 39 cents to $31.49, National Australia Bank was minus 30 cents at $32.30, while Commonwealth Bank bucked the trend to lift 33 cents to $82.35.
The gold miners were among the best performers, following a rally in gold prices overnight.
Newcrest was up 21 cents at $10.49 and Northern Star was nine cents stronger at $1.26.
As for the major miners, BHP Billiton was up 51 cents at $29.39, Rio Tinto had gained 90 cents to $56.40, and iron ore miner Fortescue Metals had added one cent at $2.56.
Vacuum cleaner retailer Godfreys Group enjoyed a solid debut on the share market, closing 10 cents higher at $2.85, above the $2.75 investors paid as part of the company’s $75 million initial public offering.
Most retailers were down, including Harvey Norman which shed 17 cents to $3.43, Premier Investments dropped 41 cents to $10.27 and Pacific Brands was 1.5 cents weaker at 50 cents.
KEY FACTS
* At 1615 AEDT on Wednesday, the benchmark S&P/ASX200 index was down 23.7 points, or 0.45 per cent, at 5,259 points.
* The broader All Ordinaries index was down 21.2 points, or 0.40 per cent, at 5,237.1 points.
* The December share price index futures contract was 17 points lower at 5,267 points, with 32,501 contracts traded.
* National turnover was 1.3 billion securities worth $4.52 billion.
