Expectations there will be an interest rate rise in the US has weighed on local banking shares, offsetting gains from energy and materials stocks, which is holding the Australian share market flat.
The benchmark S&P/ASX200 index was up 6.4 points, or 0.10 per cent, at 6192.3 points on Wednesday, while the broader All Ordinaries index was 8.6 points, or 0.14 per cent, higher at 6307.7 points.
CMC Markets’ chief strategist Michael McCarthy said investors had accepted the US Federal Reserve will lift rates when it concludes its two-day meeting early on Thursday morning, Australian time.
But the focus had turned to the Fed’s economic projections and chairman Jerome Powell’s proceeding press conference.
“A more hawkish statement could particularly weigh and of course with the US 10-year bond hovering at four-year highs for yield, there’s potential for a sharp move in interest rates,” Mr McCarthy said.
This, as well as the ongoing royal commission, dragged on local financial stocks on Wednesday, down 0.63 per cent.
ANZ suffered the biggest losses, down 0.9 per cent to $27.96, and Westpac the least, down 0.3 per cent to $27.81.
Mr McCarthy said precious metal stocks, gold and silver, as well industrial metal stocks were supported, lifting the materials sector 0.82 per cent.
BHP shares were up 1.2 per cent to $34.50, while Rio Tinto was 1.2 per cent higher at $80.03.
Meanwhile, the four-year high Brent crude reached this week has continued to boost energy stocks.
Its sector was one of the strongest on the market, up 0.87 per cent.
In companies news, Nufarm has slumped to a $15.6 million full-year loss on the back of $91.5 million in drought-related impairments.
The agricultural chemical supplier’s shares last traded at $6.40 before entering a trading halt on Tuesday pending a capital raising.
The Australian dollar held firm on Wednesday despite the expected interest rate rise in the US.
The Aussie’s buying 72.61 US cents, from 72.46 US cents on Tuesday.
ON THE ASX:
* The S&P/ASX200 closed up 6.4 points, or 0.10 per cent, at 6192.3 points
* The All Ordinaries was 8.6 points, or 0.14 per cent, higher at 6307.7 points
* In futures trading the SPI200 futures index was down one point, or 0.02 per cent, at 6181.0 points at 1630 AEST.
CURRENCY SNAPSHOT AT 1630 AEST:
One Australian dollar buys:
* 72.61 US cents, from 72.46 US cents on Tuesday.
* 81.93 Japanese yen, from 81.81
* 61.72 euro cents, from 61.65
* 55.10 British pence, from 55.25
* 108.96 NZ cents, from 109.07
The spot price of gold in Sydney at 1630 AEST was $US1,200.18 per fine ounce, from $US1,199.24 on Tuesday.