Australian shares dropped on Thursday as a galloping Australian dollar and renewed worries about global growth reduced the appeal of equities.
The S&P/ASX 200 index fell 0.7 per cent or 41.5 points to 5,673.6 by 0321 GMT, pulling closer to three-month lows touched last week. The benchmark, however, is still up 0.7 per cent for the week.
“The Aussie dollar tracking above 81 cents is probably undermining a lot of potential across the sectors of our market,’’ said Ben Le Brun, a market analyst at OptionsXpress.
The Australian dollar powered up to a four-month peak of $0.8164 in early trade to be last at $0.8120.
Bond market rout
Not helping stocks is a global bond market rout, with rising yields making equities look more expensive in comparison to debt.
The mining sector was hard-hit with iron ore producer Fortescue Metals Group off nearly 7 per cent, while BHP Billiton and Rio Tinto slipped 1.7 per cent and 2 per cent, respectively.
Likewise, the energy sector was in the red with Whitehaven Coal off nearly 2 per cent and WorleyParsons down 1.5 per cent.
Healthcare stocks also had a rough session after ResMes sleep disorder treatment failed another trial, sending its shares to their lowest in five months.
They were down nearly 19 per cent and on track for their biggest daily drop.
GrainCorp , the nation’s largest bulk grain handler, was another casualty, skidding 3 per cent after its half-year profit fell more than 40 per cent due to dry weather.
New Zealand’s benchmark NZX50 share index slipped 11.56 points of 0.2 per cent to 5,740.196, as a jump in the domestic currency weighed on companies which generate offshore revenues, particularly in Australia.
Fisher and Paykel Healthcare fell 2.8 per cent to a three-month low of NZ$6.10, while outdoor clothing manufacturer Kathmandu fell 1.4 per cent and casino operator SkyCity Entertainment eased 1 per cent.
Diligent fell 2.2 per cent, knocked lower after the services firm posted weaker-than-expected quarterly results earlier in the week.
Further losses were limited by a 1.1 per cent rise in plastics and resins maker Nuplex which extended gains after lifting its earnings guidance earlier in the week.