The sharemarket is in the red after initially opening higher, dragged down by the miners and weak leads from Wall Street.
IG Markets strategist Evan Lucas says the market is muddled by a slight bounce back in the bank, healthcare and diversified financial sectors a day after the Reserve Bank of Australia left its interest rate on hold.
Those stocks were sold off “fairly savagely” following the central bank’s decision to leave the cash rate on hold at a record low of 2.25 per cent, Mr Lucas said.
“It’s not normal that you see the ASX move as hard as it did after an RBA meeting,” he said.
“It just shows you how strong the yield trade was, and investors pressed the sell button when they didn’t see rates move. But it’s highly likely we’ll get another cut next month or the one after.”
The Australian Bureau of Statistics on Wednesday releases national accounts figures, including gross domestic product, for the December quarter.
“It’s probably going to show that growth is below trend,” Lucas said.
“So that’s why the market is being indifferent.”
The miners were hit the hardest following an overnight drop in the iron ore price and Rio Tinto going ex-dividend.
Rio Tinto plummeted $2.12 to $62.68, BHP Billiton was down 24 cents to $33.30 and Fortescue Metals fell 1.5 cents to $2.41.
Oil and gas producer Woodside Petroleum was up 25 cents at $35.35, while Santos gained nine cents to $8.03 the day after announcing a change at the top.
Santos revealed late yesterday that chairman Ken Borda would retire from the Adelaide-based energy company next month, making way for Peter Coates.
Coates, who is currently a non-executive director, will take the chair for a second stint in April, almost two years after he retired from the position.
Amid the major banks, Commonwealth Bank was down 36 cents at $91.56, National Australia Bank was 15 cents lower at $38.14, ANZ lost seven cents to $35.59, and Westpac dropped 11 cents to $38.15.
But insurance Australia Group rose 1.5 cents to $5.78, despite announcing it’s facing claims of up to $90 million as a result of devastation caused by Cyclone Marcia in Queensland.
FlexiGroup shares jumped 11 cents to $3.61, after the financial services provider snapped up New Zealand’s IT and telco equipment provider Telecom Rentals for $NZ106 million ($A102.34 million).
And Macquarie Group has placed its shares in a trading halt ahead of capital raising.
The financial services giant wants to raise $500 million to help fund its $US4 billion ($A5.11 billion) acquisition of the AWAS aircraft operating lease portfolio.
– with AAP
