(Australian Associated Press)
Technology stocks were back in vogue on the ASX, but came at a cost to the wider market as investors re-evaluated yield.
Technology stocks were best and rose 1.1 per cent, materials were up 0.81 per cent, but the rest of the market fell.
Market heavyweight CSL lost 2.09 per cent to $294.25 and the big four banks shed more than one per cent.
The benchmark S&P/ASX200 index closed lower by 43.7 points, or 0.6 per cent, to 7298.5.
The All Ordinaries closed down by 40.6 points, or 0.53 per cent, to 7552.1.
ThinkMarkets analyst Carl Capolingua said the move to technology stocks was a response to a short-term pullback in bond yields.
US bond yields particularly have dropped since US Federal Reserve officials last week brought forward estimates of rate rises to 2023.
The officials were responding to inflation concerns as the US economy surges from pandemic lows.
In Australia, Commonwealth Bank economists on Wednesday forecast the Reserve Bank to raise the cash rate in November next year to 0.25 per cent.
Mr Capolingua said earlier than expected rate increases would cap inflation, and limit the potential for higher rates.
This explained the losses in ASX financial shares. Investors in these stocks preferred a steeper yield curve, he said.
Technology providers can take longer to generate earnings and benefit from a less steep yield curve.
Financial software provider Bravura Solutions was one of the favourites and improved by 3.43 per cent to $3.62.
Afterpay rose 3.17 per cent to $122.90.
The same hunt for technology stocks played out on US markets, which have a greater weighting towards technology.
The tech-laden Nasdaq closed at a record high, while the Dow Jones Industrial Average and S&P 500 also closed higher.
Domestically, iron ore exports played a starring role in the nation’s record trade surplus of $13.3 billion in May.
Iron ore exports to China rose 20 per cent to $12.7 billion, the third consecutive monthly record.
On the ASX, the big iron ore miners were all higher.
BHP was best and rose by 1.03 per cent to $47.16.
Meanwhile, some states and territories imposed travel restrictions on people from parts of Sydney or NSW due to a growing coronavirus cluster.
Western Australia and South Australia have prevented anyone from NSW entering.
Flight Centre dropped 3.52 per cent to $15.06.
Webjet was lower by 2.31 per cent to $5.08.
Woolworths will write-down the value of 13 of its CBD stores by about $50 million as the working from home trend affects sales.
The supermarket giant mentioned the charge while flagging its full-year earnings were likely to include a $57 million pre-tax net gain from significant items.
Shares were down 1.94 per cent to $42.51.
Fruit and vegetable grower Costa Group will buy citrus grower 2PH Farms for about $200 million.
Costa will raise $190 million from a share sale to help fund the purchase.
Trading of Costa shares had been paused. They last traded at $3.40.
The Australian dollar was buying 75.51 US cents at 1729 AEST, higher from 75.16 US cents at Tuesday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed lower by 43.7 points, or 0.6 per cent, to 7298.5 on Wednesday.
* The All Ordinaries closed down by 40.6 points, or 0.53 per cent, to 7552.1.
* At 1729 AEST, the SPI200 futures index was lower by nine points, or 0.13 per cent, to 7190.
One Australian dollar buys:
* 75.51 US cents, from 75.16 cents on Tuesday
* 83.71 Japanese yen, from 82.92 yen
* 63.33 Euro cents, from 63.13 cents
* 54.03 British pence, from 54.09 pence
* 107.48 NZ cents, from 107.61 cents.