The Australian share market fell below 6,000 points to a one-month low on Wednesday, with financial stocks slumping under investor concerns about possible economic fallout from Italy’s political uncertainty.
The benchmark S&P/ASX200 index closed down 28.9 points, or 0.48 per cent, at 5,984.7 and the broader All Ordinaries index was down 27.9 points, or 0.46 per cent, at 6,093.8 points.
Rakuten Securities chief operating officer Nick Twidale blamed the market sell-off on growing concerns that Italy will face another election that may result in an anti-Euro government and destabilise the eurozone further.
“Added to that is further tension with regards to the US trade negotiations with China, President (Donald) Trump coming out and surprising talk about more tariffs when there had been a pullback on that and more conciliatory tone previously,” Mr Twidale said.
On Tuesday in the United States, President Trump surprised observers by setting a June 15 deadline for naming a list of US$50 billion worth of Chinese technology products to be hit with a 25 per cent tariff.
Locally the financials index was the hardest hit, with the major banks closing lower.
ANZ, which also announced it will sell its New Zealand pension business, dropped 1.8 per cent to $27.21, Westpac fell two per cent to $27.85, Commonwealth Bank shed 1.1 per cent to $69.60 and National Australia Bank fell 0.9 per cent to $26.80.
Mining giants Rio Tinto and BHP Billiton also lost ground, falling 1.2 per cent to $82.02 and 0.3 per cent to $32.20, respectively.
Oil falling to around US$66.70 a barrel during the trading session also hurt energy stocks, Mr Twidale said.
Woodside Petroleum closed 0.4 per cent lower at $31.67 and Origin Energy slipped 0.3 per cent to $9.48.
The utilities sector gained as investors sought safe haven stocks and the health care sector also found support, with hearing implants specialist Cochlear and blood products and vaccine giant CSL both closing more than one per cent higher at $198.32 and $187.06, respectively.
Meanwhile, the Australian dollar fell to a two-week low of 74.76 US cents in early morning trade against a strengthening US dollar, amid the eurozone uncertainty.
The Aussie recovered somewhat through out the session, trading around 75.06 US cents at 1700 AEST, down from 75.35 US cents on Tuesday.
ON THE ASX AT THE CLOSE:
* The benchmark S&P/ASX200 was down 28.9 points, or 0.48 per cent, at 5,984.7 points
* The broader All Ordinaries index was down 27.9 points, or 0.46 per cent, at 6,093.8 points
* The SPI200 futures contract was down 20 points, or 0.33 per cent, at 5,993 points
* National turnover was 3.2 billion securities traded worth $8.6 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 75.06 US cents, from 75.35 US cents on Tuesday
* 81.699 Japanese yen, from 82.06 yen
* 64.82 euro cents, from 64.96 euro cents
* 56.55 British pence, from 56.71 pence
* 108.46 NZ cents, from 108.70 NZ cents
The spot price of gold in Sydney at 1700 AEST was $US1,297.67 per fine ounce, from $US1,296.72 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 5.75 per cent May 2021, 2.0914pct, from 2.1134pct on Tuesday
* CGS 2.25pct May 2028, 2.6472pct, from 2.687pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.35 (implying a yield of 2.65pct), from 97.31 (2.69pct) on Tuesday
* June 2018 3-year bond futures contract was 97.875 (2.125pct), from 97.85 (2.15pct)
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)