Australia’s share market has closed a little lower, with the contrasting fortunes of bank and property stocks showing the consequences of investor’s expectations of inflation.
The S&P/ASX200 benchmark index closed lower 18.1 points, or 0.27 per cent, to 6679.1 on Tuesday.
The index was at a session high of 6733.5, about half a per cent higher, about 1200 AEDT but slipped.
The All Ordinaries closed down 20.4 points, or 0.29 per cent, at 6939.1.
The financial sector was best, higher by 0.73 per cent. Telecommunications was up 0.19 per cent.
There were falls of more than one per cent for property and health.
The heavyweight materials sector lost 0.8 per cent.
Earlier, US markets closed lower. Investors mostly sold stocks after big rallies in recent sessions, as they expect more economic stimulus from a Democrat-controlled Congress.
CMC Markets chief strategist Michael McCarthy said the ASX performance was a fairly gentle pull-back.
The US dollar has steadied on inflation expectations and there was little change to the Aussie dollar, which hovered around 77 US cents.
Mr McCarthy said he was a bit surprised financial stocks were best.
“The outlook for financial stocks appears reasonably constrained,” he said.
This was due to bank leaders ensuring the recommendations of the banking royal commission were met and economic recovery this year was already priced in by investors, he said.
Investors were attracted by a perception of value.
“Banks’ valuations have been well below historical levels. I’d say it was a bargain hunt,” Mr McCarthy said.
Banks are also likely to benefit from inflation.
Rising bond yields in the US have shown investors expect inflation from president-elect Joe Biden’s agenda to give more money to Americans.
Mr McCarthy cited inflation expectations as a reason for the 1.2 per cent decline in the property sector.
In Australia, many Brisbane residents are enjoying their first full day without onerous coronavirus restrictions after a three-day lockdown.
No new infections were reported in Queensland after a quarantine hotel cleaner tested positive to a more infectious strain last week.
NSW recorded five infections, all linked to Sydney clusters, while Victoria reported none.
The weekly ANZ-Roy Morgan consumer confidence index ticked-down 0.1 per cent in its first release of 2021.
The drop comes after the Brisbane COVID-19 lockdown and related border closures.
On the ASX, buy now pay later provider Sezzle rose 2.72 per cent to $6.42 after giving figures from its fourth quarter.
The company claimed records for underlying merchant sales and active users and merchants.
Merchant fees rose 195 per cent on the same quarter last year to $US17.2 million ($22.3 million).
In banking, NAB was best, up 1.08 per cent to $23.46.
Four-wheel-drive parts maker ARB Corporation was higher by 5.75 per cent to $33.47 after it said sales for the first-half were up 21 per cent on the same period the previous year.
First-half sales were $284 million for the six months to December 31, although the figures have not yet been audited.
Pushpay Holdings, which makes software that allows people to donate to organisations, was up 2.68 per cent to $1.53.
The company said its December performance and processing volume both beat expectations. It upgraded full-year earnings guidance from up to $US58 million to up to $US60 million.
Faring worst of the big miners, BHP lost 1.08 per cent to $46.00.
The Aussie dollar was buying 77.04 US cents at 1720 AEDT, higher from 76.95 US cents at the close of trade on Monday.
ON THE ASX
* The S&P/ASX200 benchmark index closed lower 18.1 points, or 0.27 per cent, to 6679.1 on Tuesday.
* The All Ordinaries closed down 20.4 points, or 0.29 per cent, at 6939.1.
* At 1720 AEDT, the SPI200 futures was higher by 13 points, or 0.2 per cent, to 6630 points.
One Australian dollar buys:
* 77.04 US cents, from 76.95 cents on Monday
* 80.30 Japanese yen, from 80.20 yen
* 63.42 Euro cents, from 63.21 cents
* 56.90 British pence, from 57.03 pence
* 107.41 NZ cents, from 107.13 cents.