Close Australian shares have dropped for a third consecutive day as lower base metal prices pressured miners, but gains in defensive stocks such as Telstra helped to limit losses.
The Reserve Bank of Australia's decision to leave the official cash rate unchanged was widely expected and had little effect on the equities market.
At the close, the benchmark S&P/ASX200 index was down 16.8 points, or 0.4 per cent, at 3766.9 points, hitting a five-week low. The broader All Ordinaries index had shed 16.4 points, or 0.4 per cent, to 3767.8.
Among the sectors, materials were down 1 per cent, energy stocks lost 1 per cent, financials shed 0.5 per cent, but utilities gained 2.7 per cent.
need2know:
- Asian shares are mixed amid doubts over the recovery
- The dollar dips below 79.5 US cents after the RBA decision
- Oil edges up above $US64, after four days of falls
- Gold is little changed, hovering below $US930
- Dow futures are 7 points lower at 8270
The RBA's no-change decision was widely expected and the futures market
had priced in only a 4 per cent chance of a rate cut, IG Markets
analyst Ben Potter said.
"The real focus was on what they were going to say and if they were
going to dull down the sense that people think there was going to be a
rate rise before year's end, which is what they've tried to do.
"The bias is certainly towards an easing if need be down the track.''
Defensive stocks in demand
Mr Potter said trading was "defensive'', with utilities and telcos leading the market.
Major movers included AGL Energy, up 63 cents, or 4.8 per cent, at $13.78, and Telstra, which advanced 3 cents, or 0.9 per cent, to $3.32.
Strength in staples saw Wesfarmers add 24 cents, or 1.1 per cent, to $23.02, Mr Potter said.
Energy and materials stocks weighed down the market, with Rio Tinto losing $1.15 or 2.4 per cent to $47.35 and BHP Billiton down 37 cents, or 1.1 per cent, to $32.25.
Oil stocks lost ground, with Oil Search down 3 cents at $5.29, Santos dropping 33 cents to $13.23 and Woodside Petroleum 38 cents weaker at $40.47.
Question mark over commodities
"Everyone has got a question mark over commodities at this moment ... positive leads are few and far in between," said Richard Morrow, director of equities at E.L. & C. Baillieu Stockbroking. "There is just a soggy feel to our commodity end of the market."
Major gold stocks moved into negative territory along with the gold price.
Lihir Gold gave up 2 cents at $2.85, Newcrest Mining fell 61 cents to $29.57 and dual-listed Newmont Mining eased 6 cents to $4.96.
China-focused gold miner Sino Gold Mining made its debut on the ASX 100 index on Tuesday and finished 27 cents, or 5.78 per cent, higher at $4.94.
Origin Energy eased 2 cents to $13.80 after signing a new agreement with tax authorities to minimise the company's compliance costs.
Banks mostly weaker
The financials sector was mostly weaker, with Westpac the only big four bank to make a gain.
Westpac added two cents to $19.10, Commonwealth Bank eased 6 cents to $36.99, National Austalia Bank fell 16 cents to $21.67 and ANZ Bank lost 8 cents to $15.90.
QBE Insurance was a rare bright spot in the sector, gaining 25 cents to $19.57.
Retailers were mixed, with clothing retailer Country Road surging 15 cents, or 4.8 per cent, to $3.25, grocer giant Woolworths 4 cents weaker at $26.27 and upmarket store owner David Jones up 4 cents to $4.41.
But major media stocks fell into negative territory.
Consolidated Media gave up 3 cents to $2.21, Fairfax Media lost 2 cents to $1.105 and its rival News Corporation dropped 34 cents to $12.35.
News' non-voting scrip fell 16 cents to $10.80.
ABB falls on profit warning
Making news today, ABB Grain lost 25 cents, or 2.7 per cent, to $9.10 after it downgraded its 2009 full-year underlying profit guidance, blaming slowing consumption of beer in Asia and a reluctance of Australian farmers to buy fertiliser and merchandise to grow crops.
Online bookmaker Centrebet gained 3.5 cents to 93.5 cents after announcing it expected strong profit growth in fiscal 2010, after upgrading guidance for the current year.
The top traded stock by volume was Lakes Oil NL, with 170 million shares changing hands for $2.29 million and pushing the share price 0.1 cents, or 7.1 per cent, higher at 1.5 cents.
Preliminary national turnover reached 1.63 billion shares, traded for a value of $3.57 billion, with 409 stocks up, 559 down and 296 steady.
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AAP, with BusinessDay
