the asx finishes lower as fed fears hit regional sentiment 1828542015

Australian shares fell Wednesday, in line with the regional trend in Asia, as comments from a US Federal Reserve board member gave the impression that the US is headed for a rise in interest rates. Only the mining sector bucked the trend to end with gains. Investors remained cautious as they waited for a key US jobs report that could shed light on future Fed strategy.

Indices and sectors

The benchmark S&P/ASX 200 fell 23.9 points, or 0.4 per cent, and closed at 5,674, while the broader All Ordinaries index was down 22.4 points, or 0.4 per cent, at 5,659.5.

The top losing sectors were energy (-1.58 per cent), telecommunications services (-1.03 per cent), consumer discretionary (-1.02 per cent), utilities (-0.71 per cent) and financials (-0.62 per cent). Materials (+1.13 per cent), was the only gaining sector.

Stocks

Mining stocks were among the gainers on Wednesday, led by Fortescue Metals Group Limited (ASX:FMG) which gained 6.20 per cent to close at AU$1.18 on rumours it was in talks with certain Chinese parties are the same offer stake in its infrastructural assets. The company later clarified to the ASX that “whilst there is no imperative, Fortescue is open to commercial discussions with a range of groups on a regular basis at the mining asset level. There is no agreement of such nature with any party at this time.” BHP Billiton Limited (ASX:BHP) was up 2.28 per cent at AU$26.49 and Rio Tinto Limited (ASX:RIO) jumped 1.85 per cent to AU$52.98.

Energy stocks were the biggest drag on the market. Woodside Petroleum Limited (ASX:WPL) fell 0.40 per cent to AU$34.84, Origin Energy Ltd (ASX:ORG) was down 3.63 per cent to AU$10.61, Oil Search Limited (ASX:OSH) slumped 2.36 per cent to AU$7.03 and Santos Ltd (ASX:STO) gave up 0.98 per cent to AU$7.08. Uranium miner Paladin Energy Ltd (ASX:PDN) was the third largest loser on the S&P/ASX 200, falling 8.11 per cent to AU$0.170.

Banks were under pressure and Commonwealth Bank of Australia (ASX:CBA) lost 0.75 per cent to AU$87.37, Westpac Banking Corp (ASX:WBC) slipped 0.81 per cent to AU$34.49, Australia and New Zealand Banking Group (ASX:ANZ) shed 0.6 per cent to AU$32.58 and National Australia Bank Ltd. (ASX:NAB) was down 0.64 per cent to AU$34.34.

Retailers put up a mixed show. Though Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, fell 0.67 per cent to AU$42.78, Woolworths Limited (ASX:WOW) ended lower by 0.70 per cent at AU$28.52 and Caltex Australia Limited (ASX:CTX) declined 1.3 per cent AU$33.50, Metcash Limited (ASX:MTS) jumped 2.13 per cent to AU$1.20 and Myer Holdings Ltd (ASX:MYR) was up 1.54 per cent to AU$1.32.

In telecom, Telstra Corporation Ltd (ASX:TLS) declined 1.08 per cent to AU$6.43, iiNet Limited (ASX:IIN) fell 0.21 per cent to AU$9.42, M2 Group Ltd (ASX:MTU) was down 1.02 per cent to AU$10.69 and TPG Telecom Ltd (ASX:TPM) slipped 0.21 per cent to AU$9.40.

Economic news, currency and market outlook

Analysts expect that 225,000 jobs will have been added during July in the US, while unemployment is expected to remain flat at 5.3 per cent in the key US non-farm payrolls report scheduled to be released on Friday.

On Wall Street Wednesday, stocks closed generally higher even as investors waited for the US payroll report on Friday and a likely indication on the trajectory of future interest rates. At the closing bell, the S&P 500 rose 0.3 per cent to 2,100, rebounding after three sessions of declines, the Nasdaq Composite gained 34 points, or 0.7 per cent, to 5,140, while the Dow Jones Industrial Average lost 10 points, or 0.1 per cent, to 17,540.

The Australian dollar is showing signs of strength, rebounding even as the US greenback strengthened on a positive US service sector report. At 06:30 this morning (AEST) the local currency was trading at 73.57 US cents, up from 73.49 US cents on Wednesday.

The Australian stock market is likely to open higher today given that at 6.45 am (AEST) the September ASX SPI200 Index (AP) Futures was down 14 points at 5,626.