Headline indices of the Australia share market declined on Friday, 26 July 2019, as investors elected to profit from table after hitting a fresh all time high yesterday. Meanwhile, selloff pressure mounted on following a weak lead from Wall Street overnight after flurry of downbeat quarterly results and as investors registered disappointment with European Central Bank chief Mario Draghi's putting off an interest rate cut until probably September. Around late afternoon, the benchmark S&P/ASX200 index dropped 21.73 points, or 0.32%, to 6,796.30. Meanwhile the broader All Ordinaries index, which tracks the nation's 500 biggest listed companies, declined 20.15 points, or 0.3%, to end the session at 6881.70.
Wall Street fell from record highs on Thursday following a flurry of downbeat quarterly results from Ford Motor and other companies and after European Central Bank chief Mario Draghi's comments disappointed investors hoping for a more dovish stance on monetary policy. The Nasdaq Composite tumbled 1% to 8,238.54. The Dow Jones Industrial Average dipped 0.47% to end at 27,141.05 points, while the S&P 500 lost 0.53% to 3,003.7.
Concerns are rising that the Fed may be less aggressive than expected on monetary policy when it meets next week. That came after European Central Bank (ECB) President Mario Draghi said the risk of a recession in the region was low despite earlier signalling a rate cut and more monetary easing ahead.
The ECB signaled its intention to explore monetary easing but did not cut interest rates, and President Mario Draghi sounded more upbeat on the economy than investors expected. Some traders took this to mean the central bank would not be as aggressive in its easing measures and that the Fed could follow suit when it meets next week.
The Federal Reserve is widely expected to cut interest rates next week to bolster the U. S. economy, even as the U. S. unemployment rate sits at its lowest in 50 years.
Shares of financials declined, with the "Big Four" banks retreating between 0.3% and 0.8 per cent. National Australia Bank lost 0.6% and Australia and New Zealand Banking Group lost 0.7%.
Tech stocks dropped, in line with Wall Street peers that fell after disappointing results from chipmakers, and social media giant Facebook warned that new rules and product changes aimed at protecting user privacy would slow its revenue growth into next year. Computershare fell 0.8% and Australia-listed Xero lost 1.8%.
Energy firms gained, as oil prices rose overnight supported by rising tensions between the West and Iran. Woodside Petroleum gained 0.3% and peer Oil Search advanced 0.7%.
Mining stocks were marginally higher, after falling in the previous session. Global miners BHP Group and Rio Tinto added 0.3% and 1.2%, respectively.
CURRENCY NEWS: The Australian dollar was at $0.6943 after slipping from levels above $0.696 yesterday.
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