A late rally from banking and health care stocks limited losses to the local indices but falling oil prices ensured the energy sector would drag the Australian share market lower at the close.
The benchmark S&P/ASX200 index closed 6.4 points lower, or 0.11 per cent, at 5921.8 on Friday, while the broader All Ordinaries fell 0.08 per cent.
The Australian dollar weakened against its US counterpart after the Federal Reserve kept interest rates on hold, which surprised Westpac senior currency strategist Sean Callow given the decision came as little surprise.
The Aussie was buying 72.44 US cents at 1630 AEDT from 72.82 on Thursday.
“It’s strange because it (the commentary from the Federal Reserve) was a short statement. It was exactly the decision everyone expected; it was not very enlightening and didn’t really say anything we wouldn’t have expected,” Mr Callow told AAP.
The drop-off ends a choppy week for the Aussie dollar which passed the 73 US cents mark for the first time since September but overall it’s in a positive position given it was on the cusp of falling below 70 US cents at the end of October.
“We do have a sub-70 as our base case over the next year but not short term,” Mr Callow said.
“I think it can continue to dodge 70 and with that support from commodity prices plus a very bullish RBA, I’m inclined to think there’s room to the top side.”
Meanwhile, oil prices fell nearly two per cent overnight on the back of swelling global crude supply, which looks to have halted recent gains for local energy stocks.
The sector had been heading for four straight sessions in the black but closed 1.3 per cent lower, with Woodside Petroleum, Caltex, Oil Search Ltd, Santos and Origin Energy all down between 0.2 and 2.6 per cent.
Mining stocks were also down despite iron ore and copper rising overnight, with Rio Tinto 0.3 per cent lower at $31.23 but BHP eked out a gain of 0.2 per cent to $33.41.
Both banking and health care stocks surged late to finish higher with NAB the only of the big four in the red, losing 0.1 per cent at $24.90, while ANZ and Commonwealth Bank were 0.3 and 0.4 per cent higher respectively.
Westpac closed flat after it was fined $3.3 million for unconscionable conduct in the way its traders handled a key rate for several years.
Biotech company CSL was a drag on its sector, down 0.3 per cent to $190.50, but Cochlear and ResMed were buoyant, lifting 1.8 and 1.7 per cent.
In companies news, Lendlease stocks plummeted 18.3 per cent to $14.25 after launching a review of its engineering and services unit due to problems on projects including Sydney’s NorthConnex motorway tunnel.
It forced the construction company to take a $350 million post-tax provision in its first-half results.
ON THE ASX:
* The benchmark S&P/ASX200 index was 6.4 points lower, or 0.11 per cent, at 5921.8
* The All Ordinaries was 4.9 points lower, or 0.08 per cent, at 6011.0
* At 1630 AEDT, the SPI200 futures index was down five points, or 0.08 per cent, at 5908.0 points
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 72.44 US cents, from 72.82 US cents on Thursday
* 82.52 Japanese yen, from 82.79
* 63.84 euro cents, from 63.72
* 55.52 British pence, from 55.47
* 107.47 NZ cents, from 107.22
The spot price of gold in Sydney at 1630 AEDT was $US1219.32 per fine ounce, from $US1224.11 on Thursday.