Investors spent most of Wednesday anxiously awaiting an address by US President Donald Trump, with shares trading listlessly sideways before finishing the day marginally in the red.
Buying in the banks and modest interest in utilities were not enough to keep the ASX supported, with Telstra weighing heavily on the bourse as it traded ex-dividend.
The benchmark S&P;/ASX 200 Index and the broader All Ordinaries Index slumped 0.1 per cent to 5704.8 points and 0.2 per cent to 5750.9 points respectively, posting their eighth loss over the past nine sessions.
"Earnings season has brought into focus the individual stocks on the ASX, but today Trump is certainly back on the radar," said Stephen Bruce, senior portfolio manager at Perennial Value Management.
Wall Street futures briefly jumped during Mr Trump's speech, as did the Australian dollar, but both quickly retreated to previous levels as the US President's much anticipated address to Congress offered few details on tax plans or infrastructure spending, both factors in the recent markets rally.
"He pretty much didn't say anything he hadn't said before so markets have no reason to react overly positively or overly negatively," said Randy Frederick, managing director of trading and derivatives for Charles Schwab.
Telstra shares were the main drag on the ASX. The telco giant makes up 3.4 per cent of the S&P;/ASX 200's market cap and weighed heavily on the overall bourse; it closed down 0.5 per cent to $4.64. The company traded ex-dividend on Wednesday, meaning the declared dividend belonged to the seller rather than the buyer.
Crown Resorts also traded ex-dividend and finished the day 5.8 per cent lower to $11.64.
Shares in retailers Harvey Norman and JB Hi-Fi slipped 5.8 per cent and 2.7 per cent respectively on news that global e-commerce and cloud computing behemoth Amazon plans to accelerate their Australian operation. Investors have begun to price in the risk to local retailers.
A slight dip in the iron price weighed on Rio Tinto, which closed down 1 per cent with fellow resource giant BHP Billiton not far behind, closing down 0.5 per cent.
Stock Watch: Macmahon
Shares in takeover target Macmahon surged 10 per cent to close at 16.5¢, following a non-binding heads of agreement with Indonesian miner PT Amman Mineral Nusa Tenggara. Under the agreement, Macmahon will acquire some assets from AMNT, and AMNT will become a significant shareholder in Macmahon, in a major blow to CIMIC's hostile play for the mining contractor. Macmahon will acquire about $US150 million in assets from AMNT, including loading equipment, trucks, ancillary and support assets, and usable inventory. In consideration for the acquisition of the assets, Macmahon will issue AMNT with about 959.6 million new Macmahon shares, equal to about 44.4 per cent of the company on a diluted basis, at 20.3¢ per share.
Market movers
GDP
The economy grew at a faster than expected pace of 1.1 per cent in the fourth quarter, rebounding strongly from the surprise contraction in the previous three months. Economists had predicted a 0.8 per cent rise, following the 0.5 per cent slump in the September quarter. Over the year, GDP grew 2.4 per cent, which was also well ahead of expectations of 2.0 per cent growth. Household final consumption expenditure contributed 0.5 percentage points and public capital formation contributed 0.3 percentage points to growth, the ABS said. The Aussie dollar rose as high as US77¢ following the data and stronger than expected Chinese manufacturing data before retreating to US76.56¢ in late trade.
Cocoa
Chocolate prices are set to fall as the world cocoa market shifts from a deficit to the largest surplus in six years, according to the International Cocoa Organisation. Global production will top demand by 264,000 metric tons in the 2016-17 season, which started October, the London-based group said Tuesday in a report. The deficit was 196,000 tons in the preceding year. World output is seen rising almost 15 per cent to 4.55 million tonnes in the current season, with gains in Ivory Coast, the top grower, as well as in Ghana, Indonesia and Ecuador. In contrast, worldwide grinding of cocoa beans - a measure of demand - will advance 2.9 per cent to 4.24 million tonnes, the group said.
House prices
Investor demand pushed Sydney house prices 2.6 per cent higher in February, an annual growth of 18.4 per cent, the highest since 2002, Corelogic says. Melbourne prices rose 1.5 per cent while Brisbane, Perth and Darwin house prices fell, while prices grew marginally in Hobart and Adelaide. But annual growth across all capital cities was 11.7 per cent, the highest since June 2010, according to Corelogic. "In Sydney, where the annual rate of growth is now 18.4 per cent, this is the highest annual growth rate since the 12 months ending December 2002, when the housing boom of the early 2000s started to slow," head of research Tim Lawless said.
US rate hike
A handful of influential Federal Reserve officials have jolted markets into higher expectations for a March US interest rate increase, with comments that suggested rate-setters are worried about waiting too long in the face of pending economic stimulus from Washington. New York Fed President William Dudley, among the most influential US central bankers, said on CNN that the case for tightening monetary policy "has become a lot more compelling" since the election of Donald Trump and a Republican-controlled Congress. "The risks to the outlook are now starting to tilt to the upside," he said. Fed fund futures went from a 35 per cent chance of March rate hike last week to as high as 76 per cent overnight, before settling back to 52 per cent.