The share market has fallen as weaker than expected inflation provided room for the Reserve Bank to deliver another rate cut.
All sectors of the market lost ground, following weak leads from overseas markets and the local economic data.
Macquarie Private Wealth division director Lucinda Chan said investors were being heavily swayed by events overseas, including corporate earnings from major US companies.
“That’s really how this market’s been tracking the last few weeks, given the relaxed confidence out there,” she said.
“We’re not a lot clearer about what’s happening in Europe with Greece and the issue with the US is obviously around reporting season.”
The local consumer price index rose 0.7 per cent in the June quarter, for an annual rate of 1.5 per cent, below the RBA’s target range.
RBA governor Glenn Stevens also said during a speech on Wednesday that a further interest rate cut is still possible.
“There is some talk about further rate cuts and that’s obviously saying the economy is stalling a little bit,” Ms Chan said.
BHP Billiton dropped 55 cents to $26.27 after flagging $US650 million in writedowns, mainly in its copper business, Rio Tinto shed $1.20 to $52.18, while Fortescue Metals gained one cent to $1.75.
Among the big banks, National Australia Bank fell 49 cents to $34.28, ANZ dropped 51 cents to $35.54, Westpac lost 55 cents to $34.35 and Commonwealth Bank was $1.47 weaker at $86.63.
KEY FACTS
* At 1615 AEST on Wednesday, the benchmark S&P/ASX200 index was down 92.1 points, or 1.61 per cent, at 5,614.6 points.
* The broader All Ordinaries index was down 85 points, or 1.49 per cent, at 5,603.5 points.
* The September share price index futures contract was 94 points lower at 5,552 points, with 24,591 contracts traded.
* National turnover was 1.7 billion securities worth $4.8 billion.
