A second-half rally on the Australian share market has almost overcome jitters about the prospect of earlier tapering of stimulus in the US and the latest coronavirus variant.
The market was down as much as 0.81 per cent at 1200 AEDT after the US Federal Reserve overnight warned tapering may need to be accelerated to ease inflation.
However, ASX shares including financials and materials improved and helped trim overall losses to minor damage.
Iron ore miners outperformed, with BHP and Fortescue gaining a bit more than one per cent and Rio Tinto jumping by almost two-and-a-half per cent.
Consumer staples shares struggled most, including Woolworths which had its worst day since October 27 and shed 2.4 per cent.
US Federal Reserve chair Jerome Powell troubled investors when he said central bankers in December will discuss ending bond purchases a few months earlier than planned. He cited a strong economy and higher inflation.
IG Markets analyst Kyle Rodda said investors may be looking past the reduced bond purchases to earlier rate hikes.
Mr Rodda did not expect the ASX slide to end soon, given uncertainty about the Omicron variant and its effect on the economy.
The Organisation of the Petroleum Exporting Countries (OPEC+) will respond to the variant when it meets soon to determine oil supply.
Some analysts expect OPEC+ to pause plans to add 400,000 barrels per day of supply in January, in view of recent travel restrictions.
Domestically, the Australian Bureau of Statistics will publish the trade balance for October on Thursday.
The slide in the iron ore price is expected to have weighed on Australia’s trade position in October.
On the market on Wednesday, the benchmark S&P/ASX200 index closed down 20.1 points, or 0.28 per cent to 7235.9 points.
The All Ordinaries closed lower by 29.6 points, or 0.39 per cent, to 7557.8 points.
In company news, ANZ credit card customers have started a class action against the bank and claim their contracts were unfair.
The bank is reviewing the claim, filed in the Federal Court.
ANZ shares fared worst of the big four banks, losing 0.22 per cent to $26.64 while the others gained less than one per cent each.
Australian Ethical Investment gave a better earnings forecast for the first half of its financial year.
Underlying profit after tax was tipped to be about eight per cent more than the same period last year. The forecast range is $5 million to $5.5 million.
Shares were down 4.46 per cent to $13.93.
Ampol is going ahead with the sale of 20 petrol stations to an unlisted property trust for $50.5 million.
Ampol will collect $48 million from the sale and own a 51 per cent stake in the trust, with Charter Hall to have a 49 per cent stake.
Ampol shares were down 0.7 per cent to $28.47, and Charter Hall shares were down 1.68 per cent to $4.09.
Oz Minerals has formed a joint venture to search for base metals in part of South Australia.
The company is set to invest $10 million over seven years in a deal with Minotaur Exploration to explore at Peake and Denison.
Shares were up 2.27 per cent to $26.58.
The Australian dollar was buying 71.67 US cents at 1711 AEDT, higher from 71.21 US cents at Tuesday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed down 20.1 points, or 0.28 per cent to 7235.9 points on Wednesday.
* The All Ordinaries closed lower by 29.6 points, or 0.39 per cent, to 7557.8 points.
* At 1711 AEDT, the SPI200 futures index was even at 7239 points.
CURRENCY SNAPSHOT
One Australian dollar buys:
* 71.67 US cents, from 71.21 cents on Tuesday
* 81.32 Japanese yen, from 80.41 yen
* 63.24 Euro cents, from 62.81 cents
* 53.80 British pence, from 53.37 pence
* 104.54 NZ cents, from 104.64 cents.
