The local sharemarket trended slightly lower on Tuesday after losses on Wall Street, with banks leading the way lower, while the Australian dollar fell following the Reserve Bank's rates decision.
The benchmark S&P;/ASX200 fell 0.3 per cent to 5856.6 while the broader All Ordinaries Index gave up 0.2 per cent to 5895.8.
The big four banks led the market lower, losing between 0.4 to 1.0 per cent, with Westpac the single biggest drag on the index. The sector was key to the market rally last week that drove the ASX to two-year highs.
Some pullback wasn't unexpected, as Australian shares were relatively expensive, said JPMorgan Asset Management global equities strategist Kerry Craig. Tuesday's session was emblematic of the small falls the market has experienced of late - a state of unusually low volatility Mr Craig believes cannot last.
"The expectations around financials and resources are high...They've been providing a lot of underlying support. It just becomes more fickle to find those returns when you're paying this much more [to buy into stocks] than you have in the past.
"The market's been moving higher at a pretty steady place," he said. The ASX has moved by more than 1 per cent only four days in the first three months of this year, compared to a long run average of 56 over the year.
"You've only had two other years in ASX200 history where the drawdown has been as small as it's been this year. So we're going to see some drop at some point."
The materials sector provided an overall boost to the index, rising 0.2 per cent.
The surge in coking coal prices after Cyclone Debbie disrupted production continued to benefit Whitehaven Coal and South32, where coking coal operations were unaffected. Whitehaven added 5.5 per cent and South32 added 2.5 per cent to yesterday's gains.
Rio Tinto shed 0.2 per cent while BHP Billiton fell 0.3 per cent. Fortescue Metals tumbled 1.6 per cent on the falling iron ore price.
Investors fled to gold, with the All Ordinaries Gold Index up 3.6 per cent. Gold miners such as St Barbara and Newcrest Mining added 5.4 and 3.8 per cent, respectively.
News on Tuesday that Telstra was considering taking some of its store network inhouse caused a tumble for retail partner Vita Group, which operates around 100 Telstra stores around the country. Its shares shed 21.1 per cent but Telstra didn't fare well either, falling 0.6 per cent.
The Australian dollar fell to a three-week low after the Reserve Bank kept interest rates on hold but took a more cautious view on the economy, shedding nearly half a cent to US75.65¢.
Stock watch: GetSwift
Shares in software company GetSwift surged 49.0 per cent to 73 cents after it joined forces with CBA to "improve delivery logistics". GetSwift says it has an exclusive partnership with CBA to offer the bank's retail merchants its real-time delivery platform. The deal will enable retailers who process contactless payments through CBA's so-called "Albert" tablet to use the Android device to queue, route and dispatch deliveries. CBA will also work with GetSwift to develop new technology to improve sales and deliveries, including a payments terminal with a GPS tracker. The deal comes ahead of Amazon's expected launch in Australia - an event that's widely tipped to disrupt the retail landscape in Australia.
Market Movers
Aussie drops
The Australian dollar fell to a three-week low after the Reserve Bank kept rates on hold at its monthly policy meeting, as expected, but took a more cautious view on the health of the job market. The Aussie fell nearly half a cent to US75.64c in late trade, pulling further away from a recent peak of US77.50c touched last month. Traders blamed dovish comments on the labour market, which they say surprised some Aussie dollar bulls. Most economists expect the RBA to remain on hold this year, but some noted that with inflation still elusive risks remain biased towards a lower cash rate.
Coking coal
Coking coal prices have soared 15 per cent to an 11-week high after former Cyclone Debbie tore through the Queensland coalfields. Spot markets for the bulk commodity rose from $US152.30 per tonne to $US175.70 per tonne overnight, as steelmakers scrambled to buy cargoes ahead of an expected shortage. Queensland produces more than 50 per cent of the world's seaborne coking coal and the railway that carries more than 50 per cent of Queensland's coal exports, the Goonyella line, will be out of action for about five weeks.
Trade surplus
Australia's trade surplus once again rocketed higher, hitting $3.5 billion in February, its second-highest figure, from a surplus of $1.5 billion in January. Economists had expected a surplus of $1.7 billion in the month. February's massive surplus was main due to falling imports, which slumped 5 per cent in the month, while exports rose 1.0 per cent. Economists however warned it wouldn't last due to the looming export hit from Cyclone Debbie. The import reduction is being read as another sign of soft domestic demand.
Tech emerges
Technology stocks overthrew financials as the main driver of emerging market shares last quarter. Firms from South Korean phone makers to China's biggest internet company helped drive a 17 per cent surge in technology shares in the MSCI Emerging Markets Index in the first quarter, the best showing in five years. That pushed up their weight to 24 per cent, surpassing financial shares in the index for the first time since 2004. The growing prominence of Chinese consumers is expected to continue to drive returns, said Societe Generale.
