The Australian share market has closed lower following more pushback from central bankers on the pace of global interest rate cuts, with the hawkish rhetoric also sending the local currency to a five-week low.
The benchmark S&P/ASX200 index on Wednesday dropped 21.7 points, or 0.29 per cent, to 7,393.1, while the All Ordinaries fell 24.6 points, or 0.32 per cent, to 7,622.5.
The losses came after US Federal Reserve governor Christopher Waller said overnight that the central bank should move "methodically and carefully" in cutting interest rates this year.
"With economic activity and labour markets in good shape and inflation coming down gradually to two per cent, I see no reason to move as quickly or cut as rapidly as in the past," Mr Waller said during a speech in Washington.
The market's expectations for the Fed to cut rates in March fell to 64.2 per cent, from 76.9 per cent a day earlier, according to the CME FedWatch Tool.
European Central Bank board members this week have also pushed back against expectations for aggressive rate cuts in 2024.
The release of US retail sales data for December in the overnight hours should provide more insight into whether rate cuts are needed to maintain the health of the world's biggest economy.
The ASX's 11 sectors finished mixed, six up and five down.
Energy was the biggest loser, falling 1.2 per cent as Woodside dropped 1.4 per cent and Santos dipped 0.8 per cent.
In the heavyweight mining sector, Evolution had plunged 17.3 per cent to a 10-month low of $3.10 after the goldminer again downgraded production guidance for its troubled Red Lake mine in Canada.
"The focus at Red Lake is for the operation to become a consistent and reliable producer as well as generating positive cash flow," Evolution said, blaming now-resolved material handling constraints for the mine's poor performance last quarter.
Other gold miners also lost ground as the market reassessed the prospect for rapid rate cuts, with Northern Star dropping 4.4 per cent and Newmont down 5.1 per cent.
The iron ore giants had a mixed day as China's 2023 economic growth narrowly missed analysts' expectations, with Fortescue up 0.5 per cent to $26.78 and BHP adding 0.2 per cent to $46.57, while Rio Tinto dipped 0.1 per cent to $126.54.
The Big Four banks were likewise mixed, with ANZ edging 0.1 per cent higher at $25.76, NAB basically flat at $30.74, Westpac dropping 0.7 per cent to $22.90 and CBA falling 0.6 per cent to $112.33.
In the consumer discretionary sector, Bapcor dropped 6.2 per cent to a two-week low of $5.25 after chief financial officer Stefan Camphausen resigned from the aftermarket auto parts company to take another CFO role.
Bapcor said it was with an ASX-listed company in Sydney but did not give details.
The Australian dollar dropped under 65 US cents for the first time since December 13, buying 65.58 US cents from 66.12 US cents at Tuesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Wednesday dropped 21.7 points, or 0.29 per cent, at 7,393.1
* The broader All Ordinaries fell 24.6 points, or 0.32 per cent, to 7,622.5
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.58 US cents, from 66.12 US cents at Tuesday's ASX close
* 96.80 Japanese yen, from 96.66 Japanese yen
* 60.37 Euro cents, from 60.58 Euro cents
* 52.02 British pence, from 52.14 pence
* 107.06 NZ cents, from 107.26 NZ cents
