Reserve chairman Ben Bernanke painted a downbeat assessment of the US economic outlook to the US Senate, but did indicate there were imminent moves to bolster the recovery.
Losses on the local market were contained by gains in resource stocks on the back of strengthening commodity base metal prices overnight, with the S&P-ASX Metals and Mining Index up 13.2 points to 4158.9.
A senior economist at the ANZ Bank in Wellington told Dow Jones that it was pretty obvious there was a lot of uncertainty over the growth outlook given the way markets have been trading.
“It is clear that the Fed will not only continue to stay on hold for a long time, but there is a chance that the Fed may have to do more to provide support to the economy,” Khoon Goh said
Meanwhile, UBS head of sales George Kanaan told Dow Jones that resources remained strong in Europe, neutralising the negative impact of Bernanke’s comments.
“There’s nothing negative coming out of China and I think the European bank stress
tests won’t be an issue,” he said.
The big miners BHP Billiton and Rio Tinto finished the day stronger, with BHP gaining 13c to close at $A38.88 and Rio Tinto gaining 43c to $68.23.
The same could not be said for Fortescue Metals Group which lost some ground to close 1c lower at $4.04, while Paladin Energy trod water and remained unchanged at $3.54.
OZ Minerals managed to gain 1c to close at $1.195.
The benchmark S&P-ASX 200 Index was down 38 points to 4374.7, while the broader All Ordinaries Index dropped 33.9 points to finish the day on 4394.8.
However, the big gold miners lost ground, with Newcrest Mining down 39c to $32.92, despite delivering some record production results in its June quarterly report today.
Lihir also closed the day 4c down to $4.06 after an independent expert’s report backed its takeover by Newcrest.
The spot gold price was trading 2.2c down at the time of market close at $US1182.65 an ounce.
Shares in AngloGold Ashanti were unchanged at $A9.20, despite news the Tropicana joint venture in Western Australia had been given a boost with the return of good drilling results.
The Australian dollar closed at 87.65c against the US dollar.
As for base metals, all were trading higher on the London Metal Exchange, with copper leading the charge, up 3.3% to $US6860 a tonne, followed by zinc (up 2.29% to $1918/t), nickel (up 1.93% to $19,495/t), lead (up 1.47% to $1866/t) and tin (up 0.71% to $18,370/t).
