Australian stocks fell for a third day running Friday as investor sentiment soured across the region on a rise in bond yields with the prospect that central banks around the world are dropping their easing bias.
The further decline eroded a rally Tuesday, the strongest for the local market in eight months, and left the market modestly lower for the week.
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Selling was widespread across all industry sector for the day, particularly among the major banks and energy companies.
With only about 20 stocks higher, the S&P/ASX 200 declined 55.2 points, or 1%, to finish at 5703.6. That left it down 0.3% this week.
"The back up in bond yields in response to a shift to a somewhat more hawkish tone from several central banks could have further to run, but for shares its likely just another correction," said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney. "After strong gains and signs of investor complacency, shares and bonds have been vulnerable to a correction for some time."
The minutes from the European Central Bank's latest meeting, released Thursday, focused investors on the pending withdrawal of fiscal stimulus, CMC Markets chief market strategist Michael McCarthy said.
Australia's largest banks, which carry a heavy weight in the ASX 200, were each lower, led by a 1.3% fall by Australia & New Zealand Banking and 1.1% loss by Commonwealth Bank of Australia. Investment bank and asset manager Macquarie declined by 1.7%.
Among energy stocks, Woodside Petroleum and Santos each dropped 2.6% and Oil Search was 2% lower with a weakening in oil futures in Asian trading.
The mining sector was only modestly lower as BHP Billiton and Rio Tinto picked up 1.2% and 1.1%, respectively, but iron-ore producer Fortescue Metals Group lost 1.3% and gold miner Newcrest shed 0.9%.
Coca-Cola Amatil extended the previous session's fall, losing another 2.7%. Late in the day the drinks company confirmed retailer Woolworths wouldn't stock its new "Coke No Sugar" and Domino's Pizza Enterprises hadn't renewed a supply contract.
For the day, 1.91 billion shares were traded with a value of 5.89 billion Australian dollars (US$4.47 billion), Commonwealth Securities said.
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(END) Dow Jones Newswires
July 07, 2017 04:02 ET (08:02 GMT)