Australian shares opened almost one per cent lower despite the passage through the United States House of Representatives of a bill averting a deft default.
At 1031 AEST on Tuesday, the benchmark S&P/ASX200 index was down 40.7 points, or 0.9 per cent, at 4,457.9, while the broader All Ordinaries index was down 37.5 points, or 0.82 per cent, at 4,535.2.
On the ASX 24, the September share price index futures contract was 44 points lower at 4,426 points, with 11,918 contracts traded.
CMC Markets analyst Ben Le Brun said the futures index had been pointing to a loss of over 1.5 per cent on the market.
But the passage of the legislation through the US House of Representatives eased some concerns that saw a fall on Wall Street overnight.
“It’s nowhere near as bad as the futures markets were suggesting, so that in itself gives you an idea that the worse case scenario that was possible this morning has been averted,” Mr Le Brun said.
“There are still massive problems in the US, though.
“We’re still very far from a growth scenario in the US which investors would consider a positive.
“(The US economy) is growing, but at the barest possible rate.”
The Dow Jones Industrial Average shed 10.75 points, or 0.09 per cent, to close at 12,132.49, after an index of manufacturing activity in June fell to its lowest level since July 2009.
Materials stocks posted the largest falls at open in Australia on Tuesday, with Aquarius Platinum down 18 cents, or 4.1 per cent, at $4.19, Alumina Ltd down six cents at $2.16 and BlueScope Steel had lost three cents to $1.135.
The large miners were down, too, with BHP Billiton shedding 76 cents to $41.54 and Rio Tinto losing $1.16 to $80.36.
After strong gains on Monday, the big banks fell back, with National Australia Bank down 33 cents at $24.16, Westpac down 30 cents at $20.51, ANZ losing 30 cents to $20.99, and Commonwealth salso was 30 cents lower, by less than one per cent, at $49.79.
Stocks exposed to consumer discretionary spending were marginally lower ahead of Tuesday’s Reserve Bank of Australia board meeting.
That sector would be most affected if the central bank decides to raise interest rates, Mr Le Brun said.
Making news, education provider Navitas has increased full year profit by 20.5 per cent, and says demand remains robust as students seek training opportunities.
Navitas shares were up one cent at $3.86.
Adventure wear retailer Kathmandu bucked the trend in the retail sector, saying it expects an increase in annual earnings due to a good performance from its new stores and favourable weather during its promotional periods.
Its shares were up 10 cents, or 5.7 per cent, at $1.85.
National turnover at 1031 AEST was 480.8 million shares, worth $662.9 million, with 220 shares up, 413 down, and 266 were steady.
