A sell-off on Wall Street spilled over onto the local market on Wednesday, with steep declines across most sectors ending a four-day winning streak for Australian shares.
US stocks fell the most in three weeks, after better-than-estimated increases in capital goods orders and new-home sales, and comments by Federal Reserve officials, bolstered bets for an interest-rate increase this year.
The benchmark S&P 500 Index declined 1 per cent, as did the Dow Jones, and the Australian market was down from the outset. The S&P/ASX200 fell 0.8 per cent to 5725.3, while the All Ordinaries lost 0.8 per cent to 5724.2.
"It was a weak lead last night from Wall Street and around the time that the construction work data was released there was another bout of weakness in the market," said Credit Suisse analyst Damien Boey.
The amount of construction work done fell 2.4 per cent in the March quarter, well below economists' expectations of a 1.4 per cent drop after the previous quarter's 0.6 per cent fall. In the 12 months to March it was down 8.8 per cent, the Australian Bureau of Statistics said.
"The market is saying that Australia has a growth concern and that the Reserve Bank has an implied easing bias but not an explicit one. On top of that you've got the US Federal Reserve still looking to raise rates while conceeding the growth outlook in the US is not very good."
The banks all fell, extending a losing streak that began in late April amid worries the stocks are overvalued as earnings growth slows and capital requirements tighten.
ANZ Bank dropped 0.5 per cent to $32.52, Commonwealth Bank shed 0.6 per cent to $84.13, National Australia Bank gave up 1.3 per cent to $33.56 and Westpac retreated 1.3 per cent to $33.29.
Other blue chips also had a bad day. BHP dived 1.6 per cent to $29.34, Rio slipped 1.7 per cent to $57.31 and Telstra lost 1.3 per cent to $6.21.
South32 tumbled 2.2 per cent to $2.25 amid predictions it could hand another $US400 million to $US500 million back to shareholders in the next two years and maintain its B-grade credit rating, according to Macquarie analysts.
Investors took profits on Fortescue Metals, which enjoyed a stellar rise on Tuesday on the back of Chinese interest in the stock. Fortescue slipped 1.7 per cent to $2.36, despite another small rise overnight in the price of the bulk commodity. Fellow iron ore miner Arrium also had a poor day, falling 2.8 per cent to 17 cents.
As Suncorp prepares to usher in its new chief executive, Michael Cameron, the insurance giant announced it was pouring $75 million into a technology program that aims to reap $170 million in benefits by 2018. Suncorp gained 0.1 per cent to $13.42.
The mining sector slowdown has hit labour hire firm Programmed hard but a slide in profits from its contracts in the resources industry and in blue collar manufacturing jobs has been partially offset by growth in its property and infrastructure division.
Programmed – which on Monday revealed that it had resumed talks with rival Skilled Group about a potential $700 million-plus merger – suffered a 16 per cent drop in net profit after tax to $25.7 million for the year to March, driven mainly by the mining sector slowdown.
Programmed shot up 3.5 per cent to $2.64 and Skilled gained 0.7 per cent to $1.38.
Consumer stocks had a poor day with Woolworths tumbling 2 per cent to $27.94 and Wesfarmers falling 1.5 per cent to $43.40.
