The Australian share market has closed lower after mining stocks fell in the wake of an unexpected move by China to raise its short-term interest rates.
The benchmark S&P/ASX200 closed 0.42 per cent lower on Friday at 5,621.6 points – marking a 1.6 per cent fall for the week.
ThinkMarkets senior market analyst Matt Simpson said the main reason for the market to slip from positive territory during morning trade and into the red after lunch was China’s central bank’s announcement that it was lifting its short-term interest rates, effective on Friday.
“China is tightening, which they were not expected to do on Friday,” Mr Simpson said.
“They are trying to stop money from flowing abroad and given China is a huge consumer, this has had an obvious affect on the miners.”
The major miners were among the worst hit by the news with the mining related materials sector closing more than two per cent lower.
Global miner Rio Tinto dropped $2.66, or four per cent, to $64.53, BHP Billiton fell 84 cents, or 3.1 per cent, to $26.20 and Fortescue Metals shed 31 cents, or 4.6 per cent, to $6.45.
Energy stocks were also weaker with Woodside Petroleum down 48 cents, or 1.5 per cent, at $31.73 and Oil Search off nine cents, or 1.3 per cent, at $6.90.
The big four banks were also slightly lower.
Australia’s second biggest airline Virgin dropped one cent to 20.5 cents after it warned low demand for domestic flights had led to a 37 per cent drop in its quarterly underlying pre-tax profit.
Building materials supplier James Hardie dropped 4.4 per cent, or 91 cents, to $19.94 after it downgraded its full-year profit guidance for the second time in three months.
Coming up, key US jobs data is due on Friday night Australian time.
Economists expect US non-farm payrolls data to show 175,000 jobs were added in January.
ON THE ASX:
* At 1615 AEDT, the benchmark S&P/ASX200 was down 23.8 points, or 0.42 per cent, at 5,621.6 points.
* The broader All Ordinaries index was down 23.9 points, or 0.42 per cent, at 5,672.5 points.
* The March SPI200 futures contract was down 32 points, or 0.57 per cent, at 5,566 points, with 29,556 contracts traded.
* National turnover was 3.15 billion securities traded worth $5 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 76.53 US cents, from 76.43 on Thursday
* 86.50 Japanese yen, from 86.03 yen
* 71.12 euro cents, from 70.81 cents
* 61.12 British pence, from 60.31 pence
* 105.19 New Zealand cents, from 104.75 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,213.10 per fine ounce, down $US 3.20 from $US1,216.30 on Thursday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.846pct, from 1.819pct
* CGS 4.25pct April 2026, 2.731pct, from 2.709pct
Sydney Futures Exchange prices:
* March 2017 10-year bond futures contract at 97.175 (implying a yield of 2.825pct), from 97.2 (2.8pct) on Thursday
* March 2017 3-year bond futures contract at 98.0 (2pct), from 98.02 (1.98pct).
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
