Australian shares dip after Fed chair's speech

The Australian share market has lost ground, with overnight testimony by US Fed chairman Jerome Powell proving insufficient to break the market out of its trading range.

After being down as many as 47.7 points, or 0.6 per cent, in the first hour of trading on Wednesday, the benchmark S&P/ASX200 index clawed back most of those losses after dovish talk by New Zealand's central bank.

The benchmark index ultimately finished just 12.9 points lower at 7,816.8, a loss of 0.16 per cent, while the broader All Ordinaries dropped 16.9 points, or 0.21 per cent, at 8,058.3. 

Since early June the ASX200 has traded in an increasingly narrow band, a compression pattern that usually eventually results in a big move in one direction or the other.

But Mr Powell's testimony to the US Senate banking committee was not to be that catalyst even as the S&P500 overnight rose for a sixth day to notch up its 36th closing high of 2024.

"Powell did little to sway market expectations for rate cuts this year, unveiling a more balanced assessment of inflation and growth risks, while consciously avoiding any near-term guidance," wrote Westpac economist Jameson Coombs.

Elsewhere, the Reserve Bank of New Zealand seemed to signal on Wednesday that it was pivoting towards cutting rates later in 2024.

The RBNZ left rates on hold, as was widely expected, but highlighted the gains being made in the battle against inflation, which it expects will return to target within the second half of 2024.

The ASX's 11 sectors were mixed, with five lower and six higher. 

Telecommunications was the biggest mover, rising 1.4 per cent as Telstra rose 2.4 per cent to a three-month high of $3.80 on the back of price increases the mobile operator announced on Tuesday.

The materials sector was the biggest loser, down dropping 1.2 per cent. 

BHP fell 1.3 per cent to $43.17, Fortescue fell 1.2 per cent to $21.59 and Rio Tinto retreated 1.0 per cent to $119.37.

The big four retail banks were mixed, with ANZ up 1.4 per cent to $29.70 while Westpac fell 0.6 per cent to $27.52 and CBA and NAB both edged 0.1 per cent lower, to $128.54 and $35.82, respectively. 

Insurance companies, whose bottom line tends to benefit from higher interest rates, gained ground. 

IAG rose 1.6 per cent, QBE added 1.1 per cent and Suncorp climbed 0.8 per cent.

The Australian dollar was buying 67.46 US cents, from 67.43 US cents at Tuesday's ASX close.


* The benchmark S&P/ASX200 index finished Wednesday down 12.9 points, or 0.16 per cent, at 7,816.8.

* The broader All Ordinaries dropped 16.9 points, or 0.21 per cent, to 8,058.3.


One Australian dollar buys:

* 67.46 US cents, from 67.43 US cents at Tuesday's ASX close

* 108.87 Japanese yen, from 108.45 Japanese yen

* 62.34 euro cents, from 62.30 euro cents

* 52.72 British pence, from 52.66 pence

* 110.82 NZ cents, from 110.14 NZ cents.

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.

Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store