ASX edges lower; AUD below 70 US cents

SYDNEY, AAP – A Reserve Bank meeting week has started with the ASX moving lower while interest rate talk in the US has pushed the Australian dollar below 70 US cents.

The market was down by 0.23 per cent on Monday before the Reserve Bank has its first meeting of the year on Tuesday amid many of its peers forecasting higher rates.

The US Federal Reserve last week signalled rates may rise as early as March to slow inflation.

The greenback has risen in response and moved the Aussie dollar lower.

On the ASX, major share categories financials and materials were each lower by one per cent but the rest of the market was mostly higher.

Information technology was the best performing category after Wall Street ended last week higher.

US payments giant Block, which recently purchased Afterpay, was having its best day on the ASX since joining this month.

Block, which trades under its previous name Square, was higher by six per cent to $159.04 at 1200 AEDT.

Property and consumer discretionary shares were next best. Each category was a little more than one per cent higher.

The benchmark S&P/ASX200 index was down 16.5 points, or 0.23 per cent, to 6971.6 points.

The All Ordinaries index was lower by 3.3 points, or 0.04 per cent, to 7263 points.

The Reserve Bank could be the predominant influence on the ASX this week.

Investors will be keen for the bank to forecast rate expectations given December quarter inflation (3.5 per cent annually) was more than the market expected.

Governor Philip Lowe will elaborate on the decisions when he speaks on Wednesday.

The bank will also give its monetary policy statement on Friday.

In stock news and moves, shares in glove maker Ansell fell steeply after problems for its factories and a supplier.

Ansell has shut a factory in Malaysia for at least one week to stop workers being infected with coronavirus. There were more infections at other Ansell factories.

Meanwhile a gloves supplier to the company has been stopped from importing to the US due to forced labour concerns.

Ansell was down 16 per cent to $26.16.

The Commonwealth Bank revealed first-half insurance operations would include a loss of $85 million from claims in October.

Storms and hail pillaged parts of Australia including the east coast, South Australia and Tasmania.

The bank is due to publish first-half earnings on February 9.

The bank was down one per cent to $94.49.

ANZ fared worst of the big four and dropped two per cent to $26.91.

Miner IGO produced first-half earnings which met but did not exceed investor expectations.

Investors will receive a fully franked interim payout of five cents per share, the same as the previous interim dividend.

IGO was down one per cent to $11.66.

Most of the mining heavyweights were down too. BHP dropped two per cent to $45.85. Rio Tinto shed almost two per cent to $111.49.

Fortescue Metals managed to go against the trend and rose about half a per cent to $19.56.

The Australian dollar was buying 69.95 US cents at 1200 AEDT, lower from 70.37 US cents at Friday’s close.