SYDNEY, June 28, 2006 (AFP) – Australian share prices closed 1.05 percent lower Wednesday following an overnight sell-off on Wall Street as nervous investors once again fretted about the outlook for US interest rates, dealers said.
They said the market was cautious ahead of an expected hike in interest rates by the US Federal Reserve on Thursday while weaker metal prices added to the negative sentiment.
The benchmark S and P/ASX 200 index shed 52.4 points to close at 4,946.8 while the broader All Ordinaries index lost 48.4 points to 4,909.2
Turnover was 1.07 billion shares worth 3.78 billion dollars (2.77 billion US), with falls outnumbering rises 648 to 451 and 393 stocks unchanged.
Aequs Securities head of institutional trading Ric Klusman said the market’s focus was on the US Federal Reserve decision on Thursday.
"Until that’s over there will be some uncertainty but having said that, provided we don’t get gutted (overnight on overseas markets) there is some chance of a pick up with options expiring (Thursday)," Klusman said.
The impending US decision weighed on interest rate-sensitive banking stocks with major banks falling or unchanged Wednesday as speculation continued about the possibility of further rate hikes in the pipeline.
Commonwealth Bank shares dropped 0.27 dollars to 43.29 dollars and ANZ shed 0.27 to 25.93 while National Australia Bank closed unchanged at 34.39 and Westpac was also steady at 22.45.
Lower metal prices saw index-leading resource stocks BHP Billiton and Rio Tinto lower. BHP Billiton lost 0.77 or 2.74 percent to 27.33 dollars and Rio Tinto fell 2.89 or 3.74 percent to 74.31.
Gold miners also retreated as the precious metal failed to recover levels of more than 600 US dollars an ounce. Newcrest fell 0.45 to 19.65, Lihir Gold dropped 0.13 to 2.69 and Oxiana was down 0.08 to 3.03.
Telstra gained 0.02 to 3.69 but Qantas slipped 0.03 to 2.93.