The Australian share market has closed lower as investors offload banking stocks amid political uncertainty in the US.
The S&P/ASX200 fell 0.19 per cent to 5,727.4 points with the financials sector down 0.80 per cent.
Morgans senior private client adviser Bill Chatterton said investors are concerned US President Donald Trump’s economic agenda is being delayed as he grapples with allegations he intervened in an FBI probe into his former national security adviser’s ties to Russia.
“The banks weakness today is emanating from the US,” Mr Chatteron said.
“Trump is getting embroiled in issue after issue and that raises questions over whether he’ll get through his tax reduction package.”
He said this has put pressure on investors to shift away from equities and into safer assets.
“When you need to reduce your exposure to equities then you have no choice but to sell the banks because that’s where a lot of the money is for index funds,” he said.
ANZ led the big four’s losses with a 1.89 per cent fall to $28.50.
Westpac shed 0.99 per cent to $30.85, Commonwealth Bank gave up 0.72 per cent to $80.23 and National Australia Bank declined 0.56 per cent to $30.38.
The major miners and oil producers found support after iron ore and oil prices improved overnight with BHP Billiton up 1.38 per cent to $24.28 and Woodside Petroleum up 0.12 per cent to $32.34.
Gold miners were weaker after the price of gold fell in the wake of Thursday’s bounce in the US dollar.
Elsewhere in the market, APN Outdoor and oOh!Media have scrapped their proposed $1.6 billion merger after the competition watchdog flagged concerns the deal could increase prices and lower competition.
Shares in APN Outdoor gained 1.62 per cent to $5.01, while Ooh!Media shares fell 0.45 per cent to $4.41.
Southern Cross Media shares fell by more than five per cent to $1.22 after it warned its full-year earnings will be at least $9 million below previous guidance.
Meanwhile, the Australian dollar had pared back Thursday’s gains after the greenback rebounded on the back of positive jobs and manufacturing data.
ON THE ASX:
* The benchmark S&P/ASX200 dropped 10.9 points, or 0.19 per cent, to 5,727.4 points.
* The broader All Ordinaries index dropped 6.6 points, or 0.11 per cent, to 5,768.9 points.
* The June SPI200 futures contract was down two points, or 0.03 per cent, at 5,728 points.
* National turnover was 1.89 billion securities traded worth $5.3 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.29 US cents, from 74.47 on Thursday
* 82.65 Japanese yen, from 82.90 yen
* 66.77 euro cents, from 66.91 euro cents
* 57.35 British pence, from 57.49 pence
* 107.88 New Zealand cents, from 107.51 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,250.60 per fine ounce, down $US4.50 from $US1,255.10 on Thursday.
BOND SNAPSHOT:
* CGS 4.50 per cent April 2020, 1.7316pct, from 1.741pct on Thursday.
* CGS 4.75 per cent April 2027, 2.4824pct, from 2.498pct.
Sydney Futures Exchange prices:
* June 2017 3-year bond futures contract at 98.230 (implying a yield of 1.77pct), from 98.210 (1.79pct) on Thursday.
* June 2017 10-year bond futures contract at 97.495 (2.505pct), from 97.470 (2.530pct) on Thursday.
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
