The share market has fallen due to increasing expectations of a US interest rate hike.
Better than expected US inflation data and comments from US Federal Reserve officials have sparked concern the market has underestimated the prospect of a rate hike as early as June, IG market analyst Angus Nicholson said.
“The hawkish commentary from a range of Fed speakers have highlighted the fact that the market may have underpriced the risk of an interest rate hike,” he said.
“Markets are concerned they got the expectations wrong. This drove the sell off in the US market and that spread to the Asian session which is why the Australian market is down.”
Weakness was experienced in most sectors of the market.
National Australia Bank slipped 61 cents, or 2.2 per cent, to $27.52, Commonwealth Bank shed $1.08, or 1.4 per cent, to $77.62, Westpac dropped 21 cents to $29.99, while ANZ bucked the trend to climb 19 cents to $24.70.
Macquarie Group dumped $1.67, or 2.4 per cent, to $69.35.
In retail, Coles owner Wesfarmers dropped 44 cents to $42.85, Woolworths shed 37 cents to $22.36 and Blackmores plunged $9.01, or 5.1 per cent, to $166.88.
Mining giant BHP Billiton gained 22 cents to $19.43 and Rio Tinto slipped five cents to $45.82.
KEY FACTS:
* The benchmark S&P/ASX200 index dropped 39.7 points, or 0.74 per cent, to 5,356.2 points.
* The broader All Ordinaries index fell 38 points, or 0.7 per cent, to 5,420.5 points.
* The June share price index futures contract was 39 points lower at 5,359 points, with 36,218 contracts traded.
* The price of gold in Sydney at 1700 AEST was $US1,272.30, down $US3.10 on Tuesday’s price of $US1,275.40.
* National turnover was 2.4 billion securities traded, worth $5.2 billion.
