The Australian share market has closed lower for a third consecutive session as North Korea’s latest missile launch over Japan spooked investors.
The benchmark S&P/ASX200 index ended Friday down 43.7 points, or 0.76 per cent, at 5,695 points, with the heavyweight mining and banking sectors both weaker.
OptionsXpress market analyst Ben Le Brun said the missile launch – which occurred early on Friday morning Australian time – had a significant effect.
“The market has reacted to the news first thing this morning about North Korea lobbing another missile over Japan,” he said.
Investors are awaiting responses from Japan and the US after South Korea’s military confirmed Pyongyang had fired an unidentified missile despite tightening international sanctions.
Mr Le Brun said the market reaction to the latest North Korean missile test may not last long because the US futures market, which had started in a very negative mood was beginning to show some improvement.
“And of course we’ve been down this path many times before, and all it’s proven to be is a good buying opportunity,” Mr Le Brun said, in reference to earlier North Korean missile launches and tests.
Despite the North Korean action, markets in Japan and South Korea were trading higher on Friday.
On the local bourse, the big miners were hit after the price of iron ore dropped more than $US2 overnight following data indicating further softening in the growth of China’s infrastructure.
BHP Billiton dropped 2.3 per cent to $26.26, and Rio Tinto descended 2.3 per cent to $66.81.
Fortescue Metals Group lost 26 cents, or 4.5 per cent, to $5.55 after the company said chief executive Nev Power will step down in February after seven years in charge.
In the energy sector, Woodside Petroleum eased 0.5 per cent to $28.40 and Santos dumped 0.8 per cent to $3.91 but Oil Search gained 0.3 per cent at $6.80.
In the banking sector, ANZ dipped one per cent to $29.88, Westpac gave away 1.2 per cent to $31.44, Commonwealth Bank stepped back 0.6 per cent to $76.28, and National Australia Bank sagged 0.3 per cent to $30.86.
Airline operator Qantas was down seven cents, or 1.2 per cent, at $5.82.
The airline on Friday revealed CEO Alan Joyce’s annual pay has soared to $24.58 million after he successfully steered the company’s turnaround over the past two years.
Meanwhile, the Australian dollar has held its ground against the US dollar, hovering around the 80 US cents mark after receiving a boost from strong employment data on Thursday.
The Aussie was trading at 80.03 US cents at 1630 AEST on Friday, from 79.96 US cents on Thursday.
ON THE ASX AT THE CLOSE:
* The benchmark S&P/ASX200 was down 43.7 points, or 0.76 per cent, at 5,695 points.
* The broader All Ordinaries index was down 42.6 points, or 0.73 per cent, at 5,755.8 points.
* The September SPI200 futures contract was down 43 points, or 0.75 per cent, at 5,692 points.
* National turnover was 3.5 billion securities traded worth $7.5 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 79.96 US cents, unchanged from Thursday
* 88.493 Japanese yen, from 88.32 yen
* 67.06 euro cents, from 67.28 euro cents
* 59.51 British pence, from 60.53 pence
* 110.38 NZ cents, from 110.53 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,329.75 per fine ounce, from $US1,321.58 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.0015pct, from 1.9764pct
* CGS 4.75pct April 2027, 2.6909pct, from 2.6783pct
Sydney Futures Exchange prices:
* December 2017 10-year bond futures contract at 97.225 (implying a yield of 2.775pct), from 97.93 (2.07pct) on Thursday
* December 2017 3-year bond futures contract at 97.855 (2.145pct), from 97.93 (2.07pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
