The Australian share market closed lower amid concerns about a tough upcoming federal budget, strong local dollar and possible interest rate rises sparked by higher inflation figures. The benchmark S&P/ASX200 index closed down 40.9 points, or 0.83 per cent, at 4,872.9 points, while the broader All Ordinaries index slipped 41.7 points, or 0.83 per cent, to 4,954 points.
On the ASX 24, the June share price index futures contract was off 43 points at 4,872 points, on volume of 33,172. The market opened softer and stayed that way after the Australian Bureau of Statistics released stronger than expected inflation figures, showing consumer prices up 3.3 per cent over the year to March 31.
The ASX gold index was down 1.97 per cent, with the biggest gold miner Newcrest Mining 64 cents, or 1.5 per cent, weaker at $42.02. Copper players were the two best ASX200 performers, with shares in explorer CuDeco jumping up 56 cents, or 18.12 per cent, at $3.65 after it inked a sales deal with new shareholder China Oceanwide International Holdings.
Equinox Minerals was up 6.81 per cent, or 50 cents, at $3.65, after a $7 billion plus bid by the world's biggest gold miner, Barrick Gold eclipsed a hostile offer from China's Minmetals. Metal recycler Sims Metal Management surged 74 cents, or 4.74 per cent to $17.47 after it said it expected to report a net profit next week of $123 million for the first nine months of 2010/11, up 74 per cent on the prior corresponding period.
Rare earths developer Lynas Corporation fell 24 cents, or 10 per cent, to $2.21 as it postponed an extraordinary general meeting until June o consider a development deal with Forge Resources. Forge fell 10 cents to $1.10. The major miners were down, including BHP Billiton, which shed 87 cents, or 1.84 per cent, to $46.45. Rio Tinto was down 65 cents at $83.45.
The banks were mostly weaker. National Australia Bank was steady at $26.79. Commonwealth Bank was down nine cents at $53.07, Westpac was off 33 cents at $25.15 and ANZ was five cents weaker at $24.05. Preliminary national turnover was 3.16 billion shares worth $5.97 billion, with 423 stocks up, 781 down and 372 steady.
The Australian dollar soared in Asia trade to fresh 29-year highs as first quarter inflation numbers surprised on the upside and once again reignited views the central bank may need to tighten policy again in coming months. Helped by a weakening U.S. dollar as dealers bet on another dovish outlook from the Federal Open Market Monetary Committee meeting due later, the local unit rocketed to a high of $1.0851 after the consumer price index rose 1.6% in the first quarter of 2011 from the fourth quarter of 2010 and rose 3.3% from a year earlier. It was biggest quarterly move in 5 years. The Australian dollar was changing hands at $1.0835, up from $1.0764 late Thursday when Australian markets were last open, before the Easter break. Against the yen, it traded at 88.45, up from 88.28.