The Australian share market has closed lower, with the materials sector heavily sold down on shifting commodity prices and expectations of a correction.
The benchmark S&P/ASX200 index ended Wednesday down 0.54 per cent at 6,015.8 points , with the materials sector down more than two per cent.
A retreat in commodity prices triggered losses for BHP Billiton and Rio Tinto, down 2.9 per cent to $30.74 and 3.5 per cent to $78.45 respectively, after both miners lost ground on the London exchange overnight.
Macquarie Private Wealth division director Martin Lakos said traders had been anticipating a correction in the mining sector but any fall was likely to be short-lived.
“That materials space has been the outstanding, outperforming sector for the Aussie market – but whether its three per cent or 10 per cent – any correction is likely to be short-lived and shallow when the broad backdrop of fundamentals is in good shape,” Mr Lakos said.
Fortescue Metals dropped three per cent and the gold miner Newcrest Mining lost 0.6 per cent.
Diversified miner South32 dropped 1.5 per cent to $3.92 despite showing a solid first half and maintaining full-year guidance for most of its businesses, except for its South African manganese production where it flagged an improvement.
In other company news, A2 Milk announced it will expand its US presence to north-eastern states and its shares gained 2.4 per cent to $7.60.
Rival infant formula maker Bellamy’s Australia continued to gain ground after upgrading its full-year profit expectations on Tuesday, with the stock advancing 5.9 per cent to $14.48.
Sirtex Medical climbed 13.9 per cent to $17.83 after the cancer specialist announced a lift in expected first-half earnings and higher second-half sales.
A retreat in global oil prices from recent highs left local energy producers mixed, with Origin Energy up 0.4 per cent at $9.19, Woodside Petroleum down 0.5 per cent at $33.66 and Santos 0.8 per cent lower at $5.29.
The big four banks were lower at the close: ANZ down 0.3 per cent and National Australia Bank, Westpac and Commonwealth Bank all 0.6 per cent lower.
The Australian dollar had a brief gain after the release of ABS data showing a better-than-expected 2.3 per cent rise in home loan approvals for November but pulled back and at 1630 AEDT was trading at 79.51 US cents, from 79.64 US cents on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed down 32.8 points, or 0.54 per cent, at 6,015.8 points
* The broader All Ordinaries index was down 31.6 points, or 0.51 per cent, at 6,134.3 points
* The SPI200 futures contract was down 33 points, or 0.55 per cent, at 5,959 points
* National turnover was 4.6 billion securities traded worth $5.8 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 79.51 US cents, from 79.64 on Tuesday
* 88.14 Japanese yen, from 88.29 yen
* 64.92 euro cents, from 64.95 euro cents
* 57.71 British pence, from 57.77 pence
* 109.80 NZ cents, from 109.36 cents
The spot price of gold in Sydney at 1700 AEDT was $US1,334.36 per fine ounce, from $US1,340.04 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 2.0734pct, from 2.0559pct
* CGS 4.75pct April 2027, 2.7391pct, from 2.7241pct
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.20 (implying a yield of 2.80pct), from 97.225 (implying a yield of 2.775pct) on Tuesday
* March 2018 3-year bond futures contract at 97.775 (2.225pct), from 97.795 (2.205pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)