Australia’s share market was down about half a per cent and most sectors lower as investors watch early results of US Senate elections which will affect Joe Biden’s agenda.

The S&P/ASX200 benchmark index was lower by 35.3 points, or 0.52 per cent, to 6646.6 at 1200 AEDT on Wednesday.

The All Ordinaries was down 30.8 points, or 0.44 per cent, at 6924.9.

The health sector lost 1.66 per cent, and CSL dropped 1.78 per cent to $280.52.

There were losses of more than one per cent for information technology and consumer staples.

Financials and materials were each lower by less than half a per cent.

The downturn comes as early votes are counted in US Senate runoff elections in the state of Georgia, which will determine the balance of power in Washington.

If the Democrats win both seats, president-elect Biden may find it easier to provide larger fiscal stimulus as well as higher taxes and business regulation.

Early results had the Democrats narrowly ahead.

Earlier, Wall Street closed higher after manufacturing data showed US activity rose to its highest level in more than two years in December.

The top ASX sector was energy, up 2.33 per cent, after oil prices climbed nearly five per cent.

Saudi Arabia will make additional, voluntary oil output cuts of 1 million barrels per day in February and March following talks between the Organisation of the Petroleum Exporting Countries.

The cuts are part of a deal to persuade most producers to hold output steady amid concerns that more coronavirus lockdowns will hit demand.

Germany has joined the UK in extending coronavirus restrictions.

On the ASX, Oil Search was one of the major beneficiaries of the oil price rise. Shares were up 5.43 per cent to $3.88.

Beach Energy had a 4.03 per cent gain to $1.86.

Furniture retailer Nick Scali continued to thrive after on Tuesday saying first-half underlying net profit is expected to be 100 per cent more to $40.5 million, compared to the same period in 2019.

Shares were up 6.75 per cent to $11.22.

Insurance Australia Group (IAG) said it set its catastrophe reinsurance for the 2021 calendar year to the same level as last year, up to $10 billion.

The company said there was a modest increase in reinsurance charges, but these had been anticipated.

Shares were up 0.96 per cent to $4.69.

In mining, Fortescue hit a record price for the third consecutive day, $25.79. Shares had since eased to be better by 1.42 per cent to $25.55.

BHP was up 0.22 per cent to $44.40 and Rio Tinto lost 1.01 per cent to $116.60.

In banking, the big four were all lower by less than one per cent.

Earlier in the US, the S&P 500 rose 26.21 points, or 0.7 per cent, to 3,726.86. The Dow Jones Industrial Average gained 167.71 points, or 0.6 per cent, to 30,391.60. The Nasdaq composite picked up 120.51 points, or 1 per cent, to 12,818.96.

The Aussie dollar was buying 77.68 US cents at 1200 AEDT, higher from 77.08 US cents at the close of trade on Tuesday.