The Australian share market is set to fall for a third consecutive day, as it follows the negative lead of Wall Street.
Last week’s gains on the US Fed’s surprise decision to hold off on tapering its stimulus measures have given way to uncertainty about the US budget and a deadline to raise its debt ceiling.
IG market strategist Evan Lucas said the Australian market’s rise in 2013 was making stocks expensive, in terms of price earnings ratios, or a company’s current share price compared to its earnings per share.
“A possible correction has been coming for a little while, healthy is the way I’d describe it,” he told AAP.
But the index of market’s top 200 stocks would only need a modest 50 point fall to get back to historical price earnings averages, Mr Lucas said.
Miners have been the big winners in the market’s recent gains, but were mostly lower on Tuesday.
BHP Billiton was down 25 cents to $35.85, Rio Tinto was 62 cents lower at $61.95, and gold miner Newcrest had shed 13 cents to $11.90.
But iron ore miner Fortescue Metals was up 6.5 cents at $4.655.
It announced it had seized control of ore processing operations amid safety worries at a Pilbara mine where a worker died last month.
The major banks, another dominant sector of the market, were all weaker.
ANZ had fallen 26 cents to $30.93, Westpac was down 16 cents at $32.64, National Australia Bank was off 23 cents at $34.60 and Commonwealth Bank was 61.5 cents lower at $72.895.
KEY FACTS
* At 1220 AEST on Tuesday, the benchmark S&P/ASX200 index was down 22.3 points, or 0.4 per cent, at 5,230.2.
* The broader All Ordinaries index was down 20.7 points, or 0.39 per cent, at 5,225.1.
* The December share price index futures contract was 30 points lower at 5,223 with 7,474 contracts traded.
* National turnover was 572.5 million securities worth $1.2 billion.
