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Aust shares down as $A passes 81 US cents

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The Australian share market has ended the day down, while the Aussie dollar gained sharply on strong housing data and a weaker greenback

The benchmark S&P/ASX200 index finished Friday down 0.3 per cent at 5,672.6 points, while the local currency continued its upward trajectory.

At 1700 AEST the Australian dollar was at 81 US cents, well up from 79.85 US cents on Thursday.

With Australian Bureau of Statistics data showing home loan approvals gained 2.9 per cent in July, AxiTrader chief market strategist Greg McKenna said the dollar was responding to an accumulation of positive local economic data against a struggling US counterpart.

“Iron ore is doing well, copper is through the roof… they’ve all been moving in the Aussie dollar’s direction and then you get this US dollar collapse,” Mr McKenna said.

As category five Hurricane Irma approached US landfall, the greenback hit a two-and-a-half year low overnight as local inflation expectations softened and the euro gained following European Central Bank president Mario Draghi’s perceived indecision over a timetable for tapering the ECB’s stimulus program.

Citi Global Markets Director Equities Sales Karen Jorritsma said with the chance of another North Korean missile test and weakness in materials and financial stocks, local investors had a directionless session.

“The big banks saw the sharpest downward moves of the day, driven by soft offshore leads and anxiety around the US debt ceiling chatter.,” Ms Jorritsma said.

Congress regularly votes to increase the US debt ceiling but uncertainty around the latest extension secured by President Donald Trump in a deal with the Democrats remains.

President Trump has spoken in favour of axing the process of seeking borrowing approval – a process which has previously been blocked under other presidents and led to a US government shutdown.

“The last time the US government did shutdown the equity markets sold off hard and we’re seeing some of that caution here,” Ms Jorritsma said.

The big four banks led losses, with ANZ, NAB and Westpac all down between 0.5 and one per cent.

The embattled Commonwealth Bank was 74 cents, or one per cent, lower at $73.24 cents, after the prudential regulator announced it had chosen its three-member panel for its inquiry into the bank’s governance, culture and accountability, following allegations the bank breached money-laundering and terrorism-financing laws.

A lift in overnight Brent crude prices could not keep local oil stocks up, with Santos, Oil Search and Woodside Petroleum between 0.7 and 1.3 per cent lower.

For the big miners, BHP Billiton was down 0.15 per cent at $27.29, Rio Tinto lost 0.4 per cent to $68.50, and Fortescue Metals well down 2.2 per cent to $5.85.

With gold prices surging overnight, local miner Newcrest was up 0.2 per cent at $23.34, and following positive housing data, Lendlease Group was 1.7 per cent higher, at $16.75.

ON THE ASX:

* At the close the benchmark S&P/ASX200 was down 17.3 points or 0.3 per cent, at 5,672.6 points.

* The broader All Ordinaries index was down 14.4 points, or 0.25 per cent, at 5,739.4 points.

* The September SPI200 futures contract was down 13 points, or 0.23 per cent, at 5,664 points.

* National turnover was 2.9 billion securities traded worth $5.1 billion.

CURRENCY SNAPSHOT AT 1700 AEST:

One Australian dollar buys:

* 81.00 US cents, from 79.85 on Thursday

* 87.23 Japanese yen, from 87.08 yen

* 67.15 euro cents, from 66.94 euro cents

* 61.69 British pence, from 61.23 pence

* 110.74 NZ cents, from 111.23 cents

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,354.57 per fine ounce, from $US1,336.27 per fine ounce on Thursday.

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 1.9014pct, from 1.9265pct

* CGS 4.75pct April 2027, 2.5304, from 2.5885pct

Sydney Futures Exchange prices:

* August 2017 10-year bond futures contract at 97.425 (implying a yield of 2.575pct), from 97.365 (implying a yield of 2.635pct) on Thursday

* August 2017 3-year bond futures contract at 98.02 (1.92pct), from 97.99 (2.01pct).

(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)