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ASX ends lower ahead of Fed rate decision

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Published on: Monday, March 13, 2017

The Australian share market has closed lower with most sectors in the red and a sharp sell-off in energy companies as investors await the US central bank's interest rate move later this week.

The benchmark S&P/ASX200 index was 0.32 per cent lower at the close, with only the mining-related materials and telecommunications sector finishing higher.

Oil and gas companies were the biggest drag after oil prices dropped to three-month lows on Friday due to concerns about high oil supplies in the US.

Bell Direct equities analyst Julia Lee said the local share market ignored strong leads from Wall Street, unlike other markets in the region, and trading volumes were relatively low ahead of the US Federal Reserve's interest rate decision on March 15.

"Other markets traded higher after Wall Street's positive performance on the back of the strong non-farm payroll numbers," Ms Lee said.

"On the Australian market, the energy space has had a selloff and the interest rate-sensitive areas of the market have also come under pressure, especially property."

The major miners were lower during early trade but turned around in the afternoon thanks to improved Chinese iron ore futures.

"We are seeing red all across the screen but an area of strength is the materials which saw a significant turnaround after the Dalian iron ore futures rose during the session," Ms Lee said.

Rio Tinto and Fortescue Metals rose 19 cents to $59.16 and four cents to $6.15, respectively.

Among the energy players, Santos fell six cents, or 1.7 per cent, to $3.53, Oil Search dropped 16 cents, or 2.3 per cent, to $6.77 and Woodside Petroleum shed 33 cents, or 1.1 per cent, to $30.73.

A number of broker downgrades hurt the property sector with Scentre Group, the owner of Westfield shopping centres in Australia, down 2.6 per cent, or 11 cents, to $4.15.

Property developer Stockland gave up 2.4 per cent, or 11 cents, to $4.50, and Bunnings warehouse owner BWP Trust slipped 2.8 per cent, or eight cents, to $2.75.

As for the big four banks, Westpac finished flat at $35.13, while National Australia Bank, ANZ and Commonwealth Bank were marginally lower.

The US Federal Reserve's two-day interest rate meeting is expected to end with a rate hike on Thursday morning, Australian time.

The Australian dollar has traded higher at 75.71 US cents, up from 75.19 on Friday with help from a decline in the US dollar as profit takers moved in after the strong US payrolls numbers and the gains in the iron ore price.

ON THE ASX:

* The benchmark S&P/ASX200 was down 18.3 points, or 0.32 per cent, at 5,757.3 points.

* The broader All Ordinaries index was down 16.6 points, or 0.29 per cent, at 5,794.9 points.

* The March SPI200 futures contract was down 23 points, or 0.40 per cent, at 5,756 points.

* National turnover was 2.1 billion securities traded worth $4.09 billion.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 75.71 US cents, from 75.19 on Friday

* 86.83 Japanese yen, from 86.76 yen

* 70.77 euro cents, from 70.95 cents

* 62.16 British pence, from 61.85 pence

* 109.07 New Zealand cents, from 108.82 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEDT was $US1,207.80 per fine ounce, up $US9.80 from $US1,198 on Friday.

BOND SNAPSHOT:

* CGS 5.25 per cent March 2019, 1.892pct, from 1.916pct

* CGS 4.25pct April 2026, 2.882pct, from 2.931pct

Sydney Futures Exchange prices:

* March 2017 10-year bond futures contract at 97.033 (implying a yield of 2.967pct), from 96.99 (3.01pct) on Friday

* March 2017 3-year bond futures contract at 97.850 (2.15pct), from 97.82 (2.18pct).

(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)


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