ASX’s three-day winning run grinds to halt
The S&P/ASX200 benchmark index closed lower by 59.1 points, or 0.87 per cent, to 6765.5 on Thursday.
The All Ordinaries closed lower by 53 points, or 0.75 per cent, at 7037.9.
All sectors were lower. Property had the biggest drop, 2.38 per cent, after climbing 2.56 per cent on Wednesday.
Utilities lost two per cent. There were losses of more than one per cent for health, industrials, energy and consumer discretionaries.
Most Asian markets closed lower, after a mixed performance from Wall Street.
Deep Data Analytics chief executive Mathan Somasundaram said expectations of inflation in the US were affecting shares.
“Look at what bonds are doing,” he said.
“We are getting reflation in the US. That’s driving the bond market to take profits.”
Reflation is the stimulating of the economy, which governments in the US and Australia, as well as elsewhere, have done soon after the pandemic began.
Mr Somasundaram noted Australian bond yields jumped 10 basis points in the two days after the Reserve Bank decisions on Tuesday.
“That’s a decent move, and that’s telling you inflation is coming,” he said.
“When the cost of borrowing rises, the market has to pull back.”
Meanwhile, US President Joe Biden’s Democrats are preparing to push his $US1.9 trillion coronavirus relief package through without Republican votes if necessary.
In Australia, health authorities in Melbourne are testing contacts of a man who may have a more virulent variant of coronavirus.
The infected man was working at a quarantine hotel where tennis players were staying before the Australian Open.
The development comes as many West Australians continue a week of lockdown following a quarantine worker contracting coronavirus.
On the ASX, furniture retailer Nick Scali is courting controversy with no plans to repay $3.5 million in JobKeeper assistance, despite a bumper profit.