“The overseas markets didn’t give us a great lead,” Phillip Capital senior client adviser Michael Heffernan said.

“The major decliner is the National Australia Bank, which has gone ex-dividend today. I wouldn’t get concerned about that.”

Heffernan also said prices for oil and iron ore were “not that flash”.

Among the major banks at 10.27am (AEDT), Commonwealth Bank was 36 cents lower at $76.22 after it lifted its quarterly cash profit by 4 per cent to $2.4 billion.

Westpac was off 14.5 cents at $31.125, National Australia Bank had dumped $1.27 to $28.64, and ANZ had retreated 13 cents to $26.74.

In the resources sector, global miner BHP Billiton was down 31 cents at $23.16, Rio Tinto had fallen 67 cents to $50.18, but Fortescue Metals added two cents at $2.15.

Among other stocks, building products group Boral fell 8.5 cents to $5.425 as it said its performance during the first quarter of the new financial year was in line with expectations.

Airline Virgin Australia dipped 0.25 cents to 47.75 cents after it returned to the black, with a first quarter net profit of $1.7 million.

Theme parks and family entertainment centres operator Ardent Leisure backtracked 22.5 cents to $2.645 despite reporting a rise in quarterly revenue of 19.3 per cent.

Ramsay Health Care gained 16 cents to $61.96 as it said it is in talks about opening hospitals in China.

On Wall Street on Wednesday, stocks dropped after Federal Reserve Chair Janet Yellen said the US central bank could lift interest rates in December.

The Dow Jones Industrial Average fell 50.57 points, or 0.28 per cent, to 17,867.58 points.At 8.50am (AEDT) on Thursday, the currency was trading at 71.51 US cents, down from 72.08 cents on Wednesday.

ENERGY

World oil prices have sunk on rising US commercial crude inventories and production and a Federal Reserve-driven stronger US dollar.

“You have this backdrop of really strong supply, and even though we’re starting to exit refinery maintenance season, we’re still seeing crude builds,” said Matt Smith of ClipperData.

Smith said the stronger US dollar had started pressuring the oil market even before the Department of Energy report.

PRECIOUS METALS

Gold has fallen to a one-month low, dropping for the sixth straight session as the US dollar shot to a three-month high after US Federal Reserve Chair Janet Yellen raised expectations for a December interest rate increase.

In her first public comments since Fed policy makers met last week, Yellen pointed to a possible December “liftoff”.

New York Fed President William Dudley later told reporters that the December meeting is a “live possibility” for raising US interest rates for the first time in a decade.

“The main driver behind the down move is that more market participants now believe that the Fed will begin raising rates this year,” Commerzbank analyst Daniel Briesemann said.

BASE METALS

Copper has hit a one-week high, supported by bets that demand in top consumer China is set to improve thanks to government stimulus measures, and by news that miner Glencore will further cut its output of the metal.

Limiting gains in the metal, however, the US dollar rose after Federal Reserve Chair Janet Yellen said a rate hike in December was a “live” possibility, though not a certainty.

Glencore said it expects to cut 455,000 tonnes of copper output by the end of 2017. In September, it suspended copper output at two mines in Africa, removing 400,000 tonnes of cathode from the market.

“We’re already seeing tentative signs that things will pick up (in China) but the market is on hold waiting for data next week on China’s trade, which will give an indication on whether the strong (September) figures will be sustained,” said Caroline Baine, senior commodities economist at Capital Economics.

WASHINGTON – Federal Reserve Chair Janet Yellen says US economic activity remains solid and the Fed could decide to increase interest rates at its December meeting.

The vast US services sector rebounded in October with a broad pick-up in activity after two months of declines, the Institute for Supply Management says.  The US trade deficit narrowed more sharply than expected in September as imports shrank amid slowing growth in the US and global economy, official data shows.

NEW YORK – US stocks have turned mainly lower, from a positive opening, after US Federal Reserve Chair Janet Yellen said the central bank could lift interest rates at its December meeting.

The Dow Jones Industrial Average was at 17,875.93, down 42.22 points (0.24 per cent) at 0706 AEDT.

The broad-based S&P 500 was down 5.55 (0.26 per cent) to 2,104.24, while the tech-rich Nasdaq Composite Index was up 1.21 points (0.02 per cent) to 5,136.34.

US stocks have risen the last two sessions, adding to a strong October rally.

Briefing.com analyst Patrick O’Hare said there is talk the market is overbought, but it is “running headlong” into claims of a late-year surge “and one last mad dash perhaps before the Fed lifts the target rate for the fed funds rate”.

LONDON – A plunge of nearly 10 per cent in Volkswagen shares as the pollution scandal dogging the carmaker expanded to petrol engines has pulled down Frankfurt’s stock market despite the prospect of additional monetary stimulus.

VW shares fell 9.5 per cent to 100.45 euros ($A152.97) after the German car giant revealed an internal probe had found that as many as 800,000 vehicles were emitting more of the greenhouse gas CO2 than it had reported to authorities.

VW drove down the DAX which ended the day off 0.97 per cent at 10,845.24 points.

By contrast, in Paris the CAC 40 won 0.25 per cent to close at 4,948.29.

“Markets have been enthused by another big hint of further monetary stimulus from ECB president Mario Draghi while at the same time seeing better than expected service sector and manufacturing data this week,” said Jasper Lawler, an analyst at CMC Markets trading group.

In London, gains in mining and supermarket shares helped push up the benchmark FTSE 100 index 0.46 per cent to 6,412.88 points.

HONG KONG – Investors sent Japan Post stocks soaring as they made their long-awaited Tokyo trading debut, while Shanghai stocks surged more than four per cent on details of China’s next five-year plan.

The benchmark Nikkei 225 index closed up 1.3 per cent.

Chinese investors meanwhile shrugged off signals of lower economic growth from President Xi Jinping, who said annual expansion of only 6.5 per cent would be enough.

Shanghai put on 4.31 per cent, further bolstered by the announcement of plans for the first meeting between the presidents of China and Taiwan since 1949.

Stocks in the Hong Kong and Shenzhen markets rallied following an announcement by the head of China’s central bank that a trading link between the two southern Chinese cities would start this year.

Hong Kong’s Hang Seng Index closed up 2.15 per cent, while the Shenzhen Composite Index finished 5.12 per cent higher.

Ronald Wan, chief executive officer of Hong Kong-based Partners Capital International, sounded a note of caution about the proposed link, citing a similar scheme linking the Hong Kong and Shanghai markets.

“Optimism may wane soon given what has happened to the Hong Kong-Shanghai Connect. Regulatory investigations into the financial industry, as well as weak confidence in mainland stocks, may keep investors away.”

WELLINGTON – The S&P/NZX 50 Index gained 49.24 points, or 0.8 per cent, to 6071.21.

Stocks to watch on the Australian stock exchange on Thursday

AAD – ARDENT LEISURE: Ardent Leisure has its annual general meeting in Sydney on Thursday.

BLD – BORAL: Boral holds its annual general meeting in Sydney.

CBA – COMMONWEALTH BANK OF AUSTRALIA: Commonwealth Bank is expected to release its first quarter trading update.

CCP – CREDIT CORP: Credit Corp has its annual general meeting in Sydney.

FXJ – FAIRFAX MEDIA: Fairfax Media holds its annual general meeting in Sydney on Thursday.

PPT – PERPETUAL: Perpetual has its annual general meeting in Sydney.