Two days of strong gains on the Australian share market have come to a blunt end, while better-than-expected jobs figures took the Australian dollar to a two month high.
The share market’s benchmark S&P/ASX200 index fell 1.2 per cent to 5,763.2 points, after gaining 2.7 per cent over the prior two sessions.
“I think, basically, the market had run up to levels that has attracted profit-takers,” CMC Markets chief market analyst Ric Spooner said.
“On top of that, the energy sector has been weak.”
Crude oil prices have fallen to their lowest level in seven months in the wake of oil inventories falling less than expected and an international outlook suggesting that supply may increase.
Mr Spooner said the strengthening Australian dollar also weighed on the share market.
The local currency rose overnight against a US dollar that lost ground despite the US Federal Reserve hiking interest rates, and then surged almost half a cent to 76.31 US cents when May jobs figures showed a third straight month of strong employment growth.
While the Fed lifted rates as expected, investors fear weak inflation may prompt the Fed to steady the pace of future increases to interest rates, which pulled back the greenback, Mr Spooner said.
The local currency was at 76.09 US cents at 1700 AEST.
In the share market’s energy sector, Santos dropped 4.7 per cent, Oil Search fell two per cent and Woodside Petroleum was 1.7 per cent.
BHP dropped 2.9 per cent, Rio Tinto descended 3.7 per cent and Fortescue Metals surrendered 3.3 per cent as iron ore prices fell.
The big banks, which were a driver of the market’s gains earlier in the week, also dropped.
Westpac shed 2.7 per cent, ANZ gave back 2.2 per cent, National Australia Bank eased 2.1 per cent and Commonwealth Bank was 0.7 per cent weaker.
ON THE ASX:
* The benchmark S&P/ASX200 was down 70.7 points, or 1.21 per cent, at 5,763.2 points.
* The broader All Ordinaries index was down 65.5 points, or 1.12 per cent, at 5,796.7 points.
* The September SPI200 futures contract was down 83 points, or 1.4 per cent, at 5,704 points.
* National turnover was 3.2 billion shares worth $13.4 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
CURRENCY ASK BID PREVIOUS
AUD/USD 0.7609 0.7608 0.7585
AUD/JPY 83.46 83.42 83.1
AUD/EUR 0.6787 0.6784 0.676
AUD/NZD 1.0533 1.053 1.0428
AUD/GBP 0.5974 0.5973 0.5948
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,261.01 per fine ounce, down $US7.30 from $US1,268.31 per fine ounce on Wednesday
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.7226pct, from 1.7162pct on Wednesday
* CGS 4.75pct April 2027, 2.3576pct, from 2.4028pct
Sydney Futures Exchange prices:
* September 2017 10-year bond futures contract at 97.5975 (implying a yield of 2.4025pct), from 97.55 (2.45pct) on Wednesday
* September 2017 3-year bond futures contract at 98.23 (1.77pct), unchanged
(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)