The Australian share market has reversed most of the previous day's gains after underwhelming economic data out of China gave traders cause for concern.
The benchmark S&P/ASX200 index on Wednesday finished down 25.8 points, or 0.35 per cent, to 7,253.2, while the broader All Ordinaries fell 25.8 points, or 0.34 per cent, to 7,453.1.
The local bourse rallied on Tuesday following the Reserve Bank's decision to hold interest rates at 4.1 per cent, but traders were more circumspect on Wednesday.
The big four banks all predict more hikes to come, with Commonwealth Bank expecting a terminal cash rate of 4.35 per cent and ANZ and NAB forecasting a 4.6 per cent peak.
Asian equities were lower as China's export restrictions on rare-earth metals gallium and germanium sparked concerns of a semiconductor shortage, CMC markets analyst Tina Teng said.
Manufacturing data from China was another worry for investors as the June Caixin purchasing managers index came in at 53.9 points, below expectations of 56.2.
"This provides further confirmation that the Chinese economy is slipping towards a double-dip slowdown and that further stimulus measures are required to reverse the spiral," IG markets analyst Tony Sycamore said.
But bad news is good news in the long-term, he says, as the underwhelming figures should provide impetus for an immediate policy response from Chinese authorities.
The big banks weighed down the index, with the finance sector losing 0.6 per cent.
CBA slid 0.5 per cent to $101.78, Westpac was down 0.7 per cent and ANZ and NAB both went backwards 0.8 per cent.
Maligned financial services provider AMP slumped 6.1 per cent after confirming it lost a Federal Court class action challenging the validity of changes made to its "buyer of last resort" policy.
Telecommunications stocks bucked the trend, recording strong gains of 1.1 per cent, while utilities were the only other sector in the green.
UBS upgraded its outlook for Telstra to buy, sending the telco giant up 1.2 per cent to $4.36 and online jobs marketplace Seek jumped 3.9 per cent.
The big miners were mixed. Fortescue Metals was up 0.2 per cent, BHP down 0.4 per cent and Rio Tinto was flat.
Bellevue rallied 4.1 per cent after the goldminer signed an agreement with Genesis Minerals to process about 100,000 tonnes of ore from its WA Vanguard open-pit mine, while Dreadnought Resources climbed 11.5 per cent.
Ardea Resources achieved a major breakthrough in its Kalgoorlie Nickel Project, signing a memorandum of understanding with Japanese giants Sumitomo Metal Mining, Mitsubishi Corporation and Mitsui & Co to develop the ore reserve. Its shares shot up 52 per cent at the news.
Miner Lindian rose 13.3 per cent after announcing the completion of exploratory drilling at its Kangankunde rare earth project in Malawi.
Logistics company Lindsay Australia trucked along, up 11.2 per cent a day after completing its takeover of rural merchandise business WB Hunter.
Builder Johns Lyng entered a trading halt at $5.43 as it announced its planned acquisition of fire safety companies Smoke Alarms Australia and Linkfire for a combined up-front value of $61.8 million with a potential future earn-out of up to $17.25m.
Whitehaven Coal dropped one per cent to $6.85 despite a NSW court dismissing a bid by environmental activists to invalidate a planning consent for the coal miner’s Narrabri Stage 3 extension project extension on climate change grounds.
The company faces a separate legal challenge from conservation group Environment Council of Central Queensland in the Federal Court, with the case due to be heard in September.
Department store Myer enjoyed a strong day of trading to finish up 3.2 per cent at a four-week high of 65c.
The Australian dollar was up against the greenback, buying 66.86 US cents from 66.52 at Tuesday’s ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Wednesday down 25.8 points, or 0.35 per cent, at 7,253.2.
* The broader All Ordinaries fell 25.8 points, or 0.34 per cent, to 7,453.1.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.86 US cents, from 66.52 US cents at Tuesday’s ASX close
* 96.74 Japanese yen, from 96.25 Japanese yen
* 61.45 Euro cents, from 61.05 Euro cents
* 52.62 British pence, from 52.43 pence
* 107.89 NZ cents, from 108.18 NZ cents.
