The Australian share market closed almost flat as early gains drifted away following the Reserve Bank’s comments that the next interest rate movement will likely be up.
The benchmark S&P/ASX200 index added 0.2 of a point to 5,841.5 points and the broader All Ordinaries gained 1.3 points, or 0.02 per cent, to 5,934.3 points.
InvestSMART chief market strategist Evan Lucas said the market weakened in afternoon trading for several reasons, including the wording of the minutes of the last RBA meeting.
Mr Lucas said the minutes were generally positive, but may suggest that the RBA’s forecast for economic growth may not be as strong as it once was.
“They may tracking away from their GDP forecast,” Mr Lucas said.
“The growth story may be slower than forecast.”
The minutes of the RBA’s April board meeting also showed all members agree that the next move for the cash will be a rise, though that will not occur in the near term.
Mr Lucas also said iron ore prices were slightly lower, which hit the mining sector, and oil prices dropped as the chances of an escalation of US-Russia tensions over Syria eased.
Financial stocks were impacted by an admission from AMP at the financial services royal commission that company profits and shareholders were a higher priority than customers and obeying the law.
AMP shares dropped 21 cents, or 4.4 per cent, to $4.55.
National Australia Bank fell 0.4 per cent to $28.51, Westpac dropped 0.5 per cent to $28.81, ANZ lost 0.1 per cent to $26.68, while Commonwealth Bank picked up 0.2 per cent to $72.76.
Bank of Queensland shed 26 cents, or 2.4 per cent, to $10.66 after it said it will sell its life insurance business to Freedom Insurance Group for $65 million.
BHP Billiton was down 0.2 per cent at $29.93, Rio Tinto rose 0.2 per cent to $78.09 and Fortescue Metals was 0.2 per cent stronger at $4.51.
Oil Search surrendered 2.0 per cent to $7.54, Woodside Petroleum retreated 0.4 per cent to $30.39 and Santos was steady at $5.93.
Village Roadshow plunged 48 cents, or 15.2 per cent to $2.67 after the theme parks operator downgraded its profit forecast due to ongoing challenges at its Gold Coast parks and in its cinemas business.
The Australian dollar is higher against the US dollar despite losing some ground after the RBA’s comment on the next interest rate move.
Mr Lucas said economic figures released by China on Tuesday, showing economic growth of 6.8 per cent in the March quarter, was slightly better than expected and had made trading in the Australian dollar a little choppy.
ON THE ASX:
* The benchmark S&P/ASX200 was up 0.2 of a point at 5,841.5 points
* The broader All Ordinaries index was up 1.3 points, or 0.02 per cent, at 5,934.3 points
* The SPI200 futures contract was down two points, or 0.03 per cent, at 5,818 points.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 77.85 US cents, from 77.55 US cents on Monday
* 83.22 Japanese yen, from 83.15 yen
* 62.78 euro cents, from 62.91 euro cents
* 54.19 British pence, from 54.67 pence
* 105.92 NZ cents, from 105.61 NZ cents
The spot price of gold in Sydney at 1700 AEST was $US1,348.19 per fine ounce, from $US1,343.33 per fine ounce on Monday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.118pct, from 2.0925pct on Monday
* CGS 4.75pct April 2027, 2.7321pct, from 2.7130pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.225 (implying a yield of 2.775pct), from 97.245 (2.755pct) on Monday
* June 2018 3-year bond futures contract was 97.735 (2.265pct), from 97.76 (2.24pct)
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)