The Australian share market closed lower on Wednesday, dragged down by a slump in the heavyweight mining sector as worries about a possible escalation of trade tensions hit commodity prices.
The benchmark S&P/ASX200 index ended the day down 62.7 points, or one per cent, at 6,230.4 points, while the broader All Ordinaries index was down 59.7 points, or 0.93 per cent, at 6,339.2 points.
Bell Direct equities analyst Julia Lee said the trade tension between the US and other major economies impacted the ASX, particularly the materials sector which came under pressure after base metal prices slid overnight.
“Commodities are driven by mainly growth out of China, and given that the US is talking about slapping more tariffs on China this week, that’s a major risk not only for the Australian economy but the materials sector,” Ms Lee said.
The Australian dollar had a brief lift when data showed the domestic economy grew faster than expected last quarter.
The economy expanded by 0.9 per cent in the June quarter and 3.4 per cent over the 12 months to June, according to ABS national accounts data released on Wednesday.
The growth exceeded economists’ expectations for quarterly growth of 0.7 per cent and an annual improvement of 2.8 per cent.
The latest annual growth is the steepest since September 2012, when the mining boom reached its peak.
But strains in emerging markets and a broadly rising US dollar put pressure on the Aussie, which pushed above 72 US cents before falling back.
Mrs Lee said the market usually follows the Australian dollar when it spikes up after positive data but this did not happen on Wednesday.
“It looks like the share market has taken a bit more of a global view,” she said.
The Aussie dollar was buying 71.74 US cents at 1700 AEST, down from 72.05 US cents on Tuesday.
The big four banks were down with Westpac leading the losses, falling 1.3 per cent to $27.94, while NAB suffered the least, down 0.7 per cent to $28.03.
In company news, Investa Office Fund has adjourned a shareholder meeting set to vote on a takeover bid by Blackstone Group after receiving a rival offer from Canada’s Oxford Properties group.
Investa shares closed 2.3 per cent higher at $5.44.
On the ASX:
* The S&P/ASX200 closed down 62.7 points, or one per cent, at 6,230.4 points
* The All Ordinaries was down 59.7 points, or 0.93 per cent, at 6,339.2 points
* In futures trading the SPI200 futures index was down 66 points, or 1.05 per cent, at 6,214 points at 1630 AEST.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 71.74 US cents, from 72.05 US cents on Tuesday.
* 79.96 Japanese yen, from 80.23
* 62.02 euro cents, from 62.22
* 55.90 British pence, from 56.09
* 109.57 NZ cents, from 109.47
The spot price of gold in Sydney at 1700 AEST was $US1,192.68 per fine ounce, up from $US1,195.00 per fine ounce on Tuesday.