The Australian share market is lower as investors offload mining and bank stocks.
The market began Thursday morning higher only to drop due to ongoing concerns about China’s economy and the falling Australian dollar, CMC Markets chief market analyst Ric Spooner said.
The Australian dollar fell to a fresh six month low of 89.39 US cents overnight.
“There appears to be a portfolio adjustment going on, particularly with the higher yielding stocks like the banks and Telstra, as well as offshore selling in response to the weaker Australian dollar,” he said.
“The problem for overseas’ investors is that a weakening Aussie significantly reduces the value of their stock.”
He said the Chinese stimulus package had failed to allay concerns about Australia’s biggest trading partner which has posted a series of weak economic data recently.
“Another stimulus initiative is being looked upon by the market as more of a source of concern by the fact the Chinese authorities see the need to do it.”
It’s been reported China is injecting 500 billion yuan ($81 billion) into the nations largest banks to stimulate the economy.
In the resources sector, BHP Billiton fell 42 cents to $35.42, Rio Tinto lost 64 cents to $61.41 and Fortescue Metals shed 10.5 cents to $3.915 at 1200 AEST.
Commonwealth Bank dropped 55 cents to $76.80, ANZ declined 12 cents to $31.31, Westpac was minus 14 cents to $32.76 while National Australia Bank was down 27 cents at $32.91.
Shares in iron ore miner and steelmaker Arrium dropped 15.5 cents, or more than 27 per cent, to 41 cents after it completed the first stage of its $754 million capital raising.
KEY FACTS
* At 1200 AEST the benchmark S&P/ASX200 index was down 26.4 points, or 0.49 per cent, to 5,380.9 points.
* The broader All Ordinaries index fell 24.9 points, or 0.46 per cent, to 5,386.5 points.
* The September share price index futures contract has expired 19 points higher at 5,421 points, with 10,824 contracts traded.
* The December share price index futures contract was down 26 points at 5,375 points, with 25,127 contracts traded.
* National turnover was 901.5 million securities worth $2.5 billion.
