Australia’s share market had its worst session in four weeks as reporting season finished, and as concerns emerged about the Aussie dollar.
The S&P/ASX200 benchmark index finished down 107.1 points, or 1.77 per cent, to 5953.4 points on Tuesday.
The first session after reporting season produced the steepest loss since the 2.04 per cent drop on July 31.
The All Ordinaries index closed lower by 102.7 points, or 1.64 per cent, to 6143.2.
The Reserve Bank, as expected, kept the cash rate at the record low of 0.25 per cent and the yield on three year government bonds at 25 basis points.
The board decided to boost the bank’s term funding facility, which will allow banks and other institutions more funding during the coronavirus crisis.
They will be able to draw an equivalent of two per cent of their outstanding credit, at a fixed rate of 25 basis points for three years, until the end of June.
GSFM investment strategist Steve Miller said the ASX got a bit of a fillip from the decision during the session, but believed bigger issues were at play in the loss.
“There is the question of the Aussie dollar. It may be weighing on the market,” he said.
The Australian dollar continued its upward trend and nudged above 74.00 US cents earlier before easing.
Mr Miller said a high Aussie dollar could be a concern for big exporters such as miners.
He also believed US markets, which were mostly lower overnight, could be due for tougher times. He cited uncertainty about the presidential election outcome and the US Federal Reserve’s shift to a flexible inflation target.
“There is an expectation US markets will struggle from here … and I think these uncertainties are starting to weigh on global markets,” he said.
The ASX did not have the same weighting to tech giants, he warned, which have kept US markets buoyant during the pandemic.
Meanwhile, there was better news from coronavirus-ravaged Victoria.
Premier Daniel Andrews confirmed he is preparing a plan to allow people and business more freedom in the state as virus infections drop. Five deaths and 70 infections were reported on Tuesday.
Mr Andrews will reveal the plan on Sunday. Melbourne residents remain under curfew and travel restrictions until September 13.
On the ASX, there were losses of more than two per cent for financials, energy, consumer staples and property.
Information technology had the biggest loss, 3.44 per cent.
In banking, ANZ had a 2.79 per cent decline to $17.77. Commonwealth Bank slipped 2.18 per cent to $66.79, NAB lost 2.96 per cent to $17.40 and Westpac shed 2.79 per cent to $17.05.
Insurer QBE has lost its group CEO following an investigation into workplace communications.
Pat Regan is leaving after just three years in the job after the board said it had to take “decisive” action after receiving the external investigation report.
Shares finished down 6.31 per cent to $9.94.
Temple & Webster boss Mark Coulter has netted more than $22 million for himself after he sold 2.4 million of his shares.
The sale comes the day after the furniture group’s full-year results prompted a record-high share price.
Mr Coulter said the sale was partly due to his tax obligations. He retains more than 7.2 million shares.
T&W shares finished lower by 2.99 per cent to $9.40.
Miners were mostly down. BHP lost 1.08 per cent to $37.50, Rio Tinto shed 0.53 per cent to $97.48 while Fortescue was up 1.15 per cent to $17.62.
Tomorrow, items of interest will include the June quarter national accounts, which are expected to confirm the nation’s first recession since the early 1990s.
Economists expect the economy contracted by about six per cent.
In the US earlier, the S&P 500 and Dow Jones finished lower as losses in financial, industrial and energy companies outweighed gains in technology stocks.
The Nasdaq finished higher.
Recent economic data has continued to stoke investor optimism in a recovery.
The Australian dollar continued its upward trend and was buying 73.91 US cents at 1716 AEST, higher from 73.48 US cents at Monday’s close.
ON THE ASX
* The S&P/ASX200 benchmark index finished down 107.1 points, or 1.77 per cent, to 5953.4 points on Tuesday.
* The All Ordinaries index closed lower by 102.7 points, or 1.64 per cent, to 6143.2.
* At 1716 AEST, the SPI200 futures index was trading up 9.0 points, or 0.15 per cent, at 5,936 points.
One Australian dollar buys:
* 73.91 US cents, from 73.54 US cents on Monday
* 78.12 Japanese yen, from 77.71 yen
* 61.76 Euro cents, from 61.76 cents
* 55.16 British pence, from 55.15 pence
* 109.39 NZ cents, from 109.23 cents