CANBERRA: The Australian stock market pared its initial losses and is modestly lower on Thursday, tracking the lackluster cues overnight from Wall Street and lower commodity prices. The increased likelihood of the U.S. Federal Reserve raising interest rates next week also weighed on investor sentiment. In late-morning trades, the benchmark S&P/ASX 200 Index is down 5.90 points or 0.10 percent to 5,753.80, after touching a low of 5,736.70 in early trades. The broader All Ordinaries Index is losing 7.00 points or 0.12 percent to 5,792.50. The major miners are weak after iron ore prices fell 2.6 percent. BHP Billiton, trading ex-dividend, is down almost 4 percent, while Rio Tinto and Fortescue Metals are losing almost 2 percent each.
Oil stocks are also declining after crude oil prices tumbled more than 5 percent overnight. Woodside Petroleum, Oil Search and Santos are down in a range of 1.5 percent to 2.5 percent. Meanwhile, banking stocks are advancing. ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank are higher in a range of 0.6 percent to 1.4 percent. Gold miners are also higher, even as gold prices dropped for a seventh straight session overnight. Newcrest Mining is edging up less than 0.1 percent and Evolution Mining is gaining almost 2 percent.
The Australian Competition and Consumer Commission or ACCC said that Tabcorp Holdings is prepared to sell its poker machine monitoring service in Queensland to help address the competition watchdog’s concerns regarding the company’s proposed A$11 billion merger with Tatts Group. Tabcorp shares are rising more than 2 percent, while Tatts Group shares are higher by more than 3 percent. In the currency market, the Australian dollar is lower against the U.S. dollar on Thursday as strong U.S. payrolls data bolstered expectations of a rate hike by the U.S. Federal Reserve. In early trades, the local unit was trading at US$0.7536, down from US$0.7595 on Wednesday.
On Wall Street, stocks closed mixed in a choppy session on Wednesday as traders looked ahead to the monthly jobs report due on Friday as well as next week’s Federal Reserve meeting. Expectations that the Fed will raise interest rates have increased recently, with CME Group’s FedWatch tool indicating a 90.8 percent probability of a quarter-point rate hike. The Nasdaq crept up 3.62 points or 0.1 percent to 5,837.55, while the Dow fell 69.03 points or 0.3 percent to 20,855.73 and the S&P 500 dipped 5.41 points or 0.2 percent to 2,362.98.
The major European markets also finished on opposite sides of the unchanged line Wednesday. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index crept up by 0.1 percent and the German DAX Index closed just above the unchanged line. Crude oil futures plunged to 2017 lows on Wednesday after data showed another gargantuan build in U.S. stockpiles, adding to record inventories. April WTI oil plunged $2.86 or 5.4 percent to close at $50.28 a barrel on the New York Mercantile Exchange.
