Australian shares have closed lower despite strong performances from energy and mining companies, with the market falling back after two sessions of gains sparked by an easing in US-China trade tensions.
The benchmark S&P/ASX200 index was down 28.3 points at 5,828.7 points on Wednesday, with the broader All Ordinaries down 26.1 points, or 0.44 per cent, at 5,925.7 points.
Overnight, Wall Street lifted sharply as Sino-Us trade tensions eased after Chinese President Xi Jinping’s conciliatory speech at the Bo’ao forum, where he pledged to lower tariffs and open Chinese markets.
CMC Markets chief strategist Michael McCarthy said Asia-Pacific markets had already priced in the President Xi-driven positivity ahead of key events that kept traders wary on Wednesday.
US inflation data is due on Wednesday night (AEST) and China trade figures are expected on Friday, Mr McCarthy said.
As well, the US reporting season is starting in earnest with JP Morgan and a number of other financials this week due to reveal their first earnings results since recent US corporate tax cuts.
“With all those potential game changers in the wind local investors are shuffling toward the sidelines,” Mr McCarthy said.
On the local market strong rises in oil and base metal prices boosted energy and mining stocks with BHP Billiton gaining 1.9 per cent, to $29.44.
Iron ore peers Fortescue Metals and Rio Tinto added 0.7 per cent and 1.3 per cent to end at $4.47 and $76.50, respectively.
Gold hit its highest mark in a week as geopolitical tension escalated around Syria and encouraged buying of the safe-haven metal.
Evolution Mining lifted 2.2 per cent, to $3.30.
Alumina lost 2.7 per cent to $2.52, despite the metal trading higher in London following sanctions that hit Russia’s major producer United Company Rusal.
Mr McCarthy said while improved industrial sentiment was in play on Wednesday, financial stocks and interest rate sensitive stocks were under pressure.
The four major lenders dropped around one per cent, Westpac the worst performer, down 1.4 per cent, to $29.13 and Commonwealth Bank the best, losing 1.0 per cent, to $73.64.
Shares in National Australia Bank lost 1.1 per cent, to $28.84 as chief executive Andrew Thorburn said he felt grief following an alleged multi-million dollar fraud committed against the lender.
In company news, shares in daigou-focused retailer AuMake gained one cent, or 4.1 per cent, to 25.5 cents after the company announced a partnership with the Chemsave pharmacy chain that will put AuMake branded products in 150 stores.
Qantas shares lifted a cent to $6.10 as the national carrier announced it had sold its catering business to Emirates.
Earlier on Wednesday China’s consumer price index for March slowed to 2.1 per cent, well under economists’ forecasts of 2.6 per cent.
Meanwhile, the Australian dollar moved above 77.5 US cents following stronger commodity prices and a weaker US counterpart.
At 1700 AEST, the local currency was worth 77.48 US cents, up from 77.36 US cents on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 was down 28.3 points, or 0.48 per cent, at 5,828.7 points
* The broader All Ordinaries index was down 26 points, or 0.44 per cent, at 5,925.8 points
* The SPI200 futures contract was down 31 points, or 0.53 per cent, at 5,808 points
* National turnover was 3.6 billion securities traded worth $6 billion
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 77.45 US cents, from 77.36 on Tuesday
* 82.92 Japanese yen, from 82.90 yen
* 62.59 euro cents, from 62.82 euro cents
* 54.52 British pence, from 54.69 pence
* 105.28 NZ cents, from 105.37 cents
The spot price of gold in Sydney at 1700 AEST was $US1,344.296 per fine ounce, from $US1,333.09 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.0288pct, from 2.0381pct on Tuesday
* CGS 4.75pct April 2027, 2.648pct, from 2.6695pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.31 (implying a yield of 2.69pct), from 97.285 (2.715pct) on Tuesday
* June 2018 3-year bond futures contract was 97.820 (2.180pct), unchanged from the previous close
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)