The Australian share market has dipped into negative territory after it failed to rise above a level closely watched by short-term traders.
The S&P/ASX200 benchmark index was lower by 10.3 points, or 0.18 per cent, at 5562.7 points at 1200 AEST on Thursday.
The All Ordinaries index was 8.7 points, or 0.15 per cent lower, at 5671.4.
The S&P/ASX200 reached a daily high of 5,610.8 at 1009 AEST but has tapered off.
CMC Markets chief strategist Michael McCarthy said the market had failed to surge past 5,600 points a number of times recently and the level had become a key one for short-term traders’ decisions. “Traders watch points of support and resistance very closely,” Mr McCarthy said. “Where the market has made decisions before, they’ll make decisions again.” He said these traders wanted to see more investment from the masses at this level before they followed. “So I think the market is pulling back from what we see as a technical level.” The miners were a good example. BHP and Rio were higher earlier in the morning but had fallen to be trading lower. BHP was down less than 1.0 per cent to $34.49, Rio slipped less than 1.0 per cent to $94.04 and Fortescue was lower by more than 1.0 per cent to $13.69. The big four banks were all lower. Westpac fared worst, down by more than 1.0 per cent to $15.16. The energy sector was doing well, up 1.67 per cent after oil prices rose by about 5.0 per cent overnight. Santos was higher by more than 3.0 per cent to $5.29. The tech sector was boosted by gains in Afterpay, which said it continued to see strong growth in the US and had more than five million active shoppers in that market. Afterpay shares hit a record high $45.17 early and at noon were still trading more than 2.0 per cent higher at $44.00. In consumer discretionaries, gaming provider Aristocrat Leisure outlined the impact of coronavirus on its first-half results. The closure of casinos, pubs and clubs meant its net profit was down more than 14.0 per cent to $305.9 million. Many venues around the world are yet to reopen and Aristocrat shares fell by more than 4.0 per cent to $26.02.
The ASX’s mixed fortunes come after the three major Wall Street indices finished higher overnight as investors bet on a swift economic recovery from coronavirus-driven lockdowns and the potential for more stimulus measures from the Federal Reserve.
The Australian dollar was buying 65.63 US cents at 1200 AEST, up from 65.43 US cents on Wednesday.