Australia Market falls on downbeat offshore cues

Headline indices of the Australian share market closed down on Friday, 09 November 2018, as risk sentiments dampened on tracking downbeat lead from Wall Street overnight after the U.S. Federal Reserve left interest rates unchanged at its latest policy meeting. The ASX sectors were in mixed territory, with materials and energy stocks were notable losers while gains in the heavily weighted financial stocks and health care capped losses to the local indices. At closing bell, the benchmark S&P/ASX200 index declined 6.39 points, or 0.11%, at 5,921.85 points, while the broader All Ordinaries index shed 4.90 points, or 0.08%, to 6,011.02 points.

The Fed kept interest rates unchanged, as was widely expected. The central bank said in a statement, however, that it expects "further gradual increases" in the overnight rate. The Fed also did not mention the volatility that has hit the market recently. The Fed has hiked rates three times this year and is forecast to raise one more time before year-end.

 

Shares of energy companies declined, as crude oil prices fell nearly 2% overnight on the back of swelling global crude supply, with Woodside Petroleum, Caltex, Oil Search Ltd, Santos and Origin Energy all down between 0.2 and 2.6%.

Shares of materials companies were also down after reports that Australia's Queensland State is set to unveil proposed resource regulations next week for miners to pay into an insurance fund for the remediation of old mines. The regulations, if enacted, will impact the likes of global miners BHP Billiton and Rio Tinto which have operations in the mineral-rich state. Among miners, Rio Tinto 0.3% was lower at A$31.23, Bluescope Steel was down 3.4%, and South32 fell 2.8%, but BHP eked out a gain of 0.2% to A$33.41.

Shares of financials and health care companies inclined, with ANZ and Commonwealth Bank up 0.3% and 0.4% higher respectively. Westpac closed flat after it was fined A$3.3 million for unconscionable conduct in the way its traders handled a key rate for several years. Cochlear and ResMed were up 1.8% and 1.7%, respectively.

Property manager LendLease Group slumped about 16% after it made a A$350 million (S$349.3 million) after tax provision against underperformance in its engineering and services business.

CURRENCY: Australian Dollar was lower against greenback and other major currencies on Friday, after the Federal Reserve kept interest rates on hold and as sentiment was dampened by worries about rising U.S.-Sino trade war tensions. China is Australia's largest trade partner and a weakening of sentiment towards China does not bode well for the Aussie dollar. The Aussie was buying 72.44 US cents, down from 72.82 on Thursday.

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