Record lows for iron ore prices, coupled with unsettled global sentiment following unrest in the Middle East, weighed on the Australian sharemarket Wednesday although the spike in oil prices did give the energy sector a welcome boost.
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Local indices headed into negative territory very quickly following uninspiring leads from Wall Street and stayed in the red for the rest of the session.
The benchmark ASX200 index was down 0.6 per cent to 5193.7, while the broader All Ordinaries index was down 0.6 per cent to 5245.2.
Oil and gold gained Wednesday night but iron ore slid 1.9 per cent to $US43.89 per tonne - a new low since daily pricing began in 2009.
"I don't think there's anything specific driving the market," said Martin Lakos, division director at Macquarie. "It's too early to start talking about the Christmas effect.
The market continues to be locked into this trading range between 5000 and 5400 in the ASX200.
"We've rarely seen trading values exceed $US4 billion on a daily basis. That indicates to us there's no strong conviction by investors."
The energy sector was by far the best performing sector on the day, aided by the oil price adding 2.4 per cent to to $US45.90 per barrel.
Mr Lakos said there were a couple of factors driving the oil price, including the tension over Turkey's downing of a Russian military jet, but also because Saudi Arabia had started signalling it was ready to talk with the rest of OPEC about stabilising the oil price.
IG analyst Angus Nicholson also pointed to the unrest in the Middle East as a factor.
"The ASX has followed regional markets down as concerns over the Middle East saw a pullback in global equities. The increased risk premium has been seeing a rise in global oil prices, but also expectations that OPEC may agree to come to an agreement on excess supply at their meeting on 4 December are rising.
"This has supported energy stocks globally, but particularly on the ASX with the sector as a whole rising 0.7 per cent. The buying in the sector did seem to be focussed on the more established players with Origin, Woodside and Santos all moving up on the day."
Mr Nicholson said that short-covering on the London Metals Exchange overnight boosted copper 3.3 per cent and nickel rise 6.9 per cent, and the improved sentiment partially flowed through to the ASX.
"The materials sector has flipped between positive and negative territory throughout the session. But the banks have seen pretty heavy selling today and the sector as whole was down."
Among the big miners, BHP fell 0.2 per cent to $19.67 while Rio dipped 0.6 per cent to $47.14. Pureplay iron ore miner Fortescue fell 1.4 per cent to $2.08.
Among the big four banks, ANZ slipped 1.2 per cent to $27.44, Commonwealth Bank slid 0.8 per cent to $79, National Australia Bank fell 0.8 per cent to $29.57 and Westpac was flat at $31.70. Fellow blue-chip Telstra dropped 1.1 per cent to $5.36.
Woolworths bucked the gloom, turning around during the session to rise 1.4 per cent to $24.38, after Street Talk reported the retailer has been in discussions with high-profile corporate advisory boutique Luminis Partners around the future of Big W following private equity approaches.
The strategic review would include growth options, sources told Street Talk.
Competitor Wesfarmers slipped 1.3 per cent to $38.68.
Gaming operator Aristocrat Leisure said strong sales of its poker machines in North America and Australia boosted its full-year earnings earnings for the 2015 financial year with a 79 per cent rise in underlying net profit of $236.1 million beating a consensus estimate from analysts. Shares shaved off 0.1 per cent to $9.53.