Oct 5 Australian shares backtracked on
Wednesday, pulled lower by weakened commodity prices which
dragged down the mining sector, and by heightened prospects of a
U.S. Fed rate hike in December.
The S&P/ASX 200 index ticked lower by 38.4 points,
or 0.7 percent, to 5,445.6 by 0030 GMT.
Materials were the biggest drag on the benchmark index with
gold producer Newcrest Mining Ltd shedding as much as
7.6 percent to touch a four-month low.
Gold slid more than 3 percent and was on track for its
biggest one-day drop in nearly 15 months on Tuesday as the
dollar rallied after upbeat U.S. data.
Iron ore miners Rio Tinto and Fortescue Metals
fell about 2 percent, while BHP Billiton Ltd
slipped nearly a percent.
Prospects of a U.S. Federal Reserve rate hike in December
lifted after Richmond Federal Reserve President Jeffrey Lacker
said he would have voted in favor of an interest rate hike at
the Fed's September policy meeting.
"The Fed is actually being much clearer about what it sees
is the need to lift interest rates in December, than market
pricing," said Michael McCarthy, chief market strategist with
"So, I suspect that if that helps move the market more
towards the idea that there is a rate rise coming in December,
that will more closely reflect actual Fed rhetoric", McCarthy
Sentiment was also affected by a Bloomberg report that the
European Central Bank would probably wind down its
80-billion-euro ($90-billion) monthly bond purchases gradually
before ending its quantitative easing programme, citing unnamed
officials at euro zone countries' central banks.
In response, ECB media officer Michael Steen tweeted that
the bank's decision-making body has not discussed reducing the
pace of its monthly bond buying.
Energy stocks traded in the red after oil settled down on
Tuesday. Beach Energy Ltd was down 3.2 percent
while Origin Energy declined 2 percent.
At the other end, Whitehaven Coal rose as much as
4.4 percent after physical coal prices surged to the highest
level since the start of 2014.
Retail giant Woolworths Ltd edged up 0.2 percent.
Australia's retail turnover for August rose 0.4 percent,
according to Australian Bureau of Statistics. Forecasts centred
on a rise of 0.2 percent on the month, a Reuters poll showed.
New Zealand's benchmark S&P/NZX 50 index fell for a
second consecutive session, sliding nearly 0.9 percent, or 66.82
points, to 7,285.64.
Utilities and industrials were the biggest drag on the
Electricity retailers Meridian Energy Ltd and
Mercury NZ Ltd dropped 1.9 percent and 1.7 percent
(Reporting by Justin George Varghese; Additional Reporting by
Shashwat Pradhan in Bengaluru; Editing by Eric Meijer)