Australian stocks snapped a three-day winning streak on Wednesday as investors retreated on further falls in oil prices and the Chinese market.
The benchmark S&P/ASX 200 index and the broader All Ordinaries fell more than one per cent.
The falls on the Australian bourse got worse in the afternoon, mimicking sharp falls on the Chinese market, Bell Direct equities analyst Julia Lee said.
“The morning session has really been impacted by that fall in the oil futures that we saw in Asia. And then the afternoon session has been highly impacted by the Chinese session,” Ms Lee said.
US futures are down 0.8 per cent in the last hour of trading on the Australian bourse, pointing to a negative night in the US, she added.
Wall Street ended Tuesday’s session in positive territory, underpinned by a rally in oil prices and a string of stronger-than-expected earnings.
CMC Markets chief market strategist Michael McCarthy said the short term trading interests are using recent local gains to sell further stock.
“Until some of those aggressive shorts are shaken out of the market, we’re likely to see repeats of this sort of behaviour on the back of an oil rally as they prepare themselves for what they see as another move down in the underlying oil price,” he said.
Resource and financial companies led the falls, with Origin Energy down 17 cents at $3.88.
Woodside Petroleum dropped 43 cents to $25.99 and Santos fell eight cents to $2.88.
Mining giant Rio Tinto fell $1.05 cents to $38.11 following the sale of its Mount Pleasant thermal coal mine site in NSW’s Hunter Valley for $US224 million ($A319 million) plus royalties.
The divestment follows another $865 million deal struck in September when Rio offloaded its stake in the neighbouring Bengalla open cut coal mine.
Rival BHP Billiton closed 27 cents lower at $15.01.
The Commonwealth Bank fell $1.40 to $77.60, National Australia Bank dropped 86 cents to $26.90, Westpac fell 58 cents to $30.33 and ANZ Bank dropped 47 cents to $23.68.
KEY FACTS:
* At 1615 AEDT, the benchmark S&P/ASX200 index was down 60.2 points, or 1.2 per cent, at 4,946.4 points.
* The broader All Ordinaries index was down 56.3 points, or 1.1 per cent, at 5,000.8 points.
* The March share price index futures contract was down one point at 4899 points with 33,815 contracts traded, according to preliminary calculations.
* National turnover was 1.75 billion securities traded worth $4.42 billion.
