The Australian sharemarket underperformed leads from overseas markets and a slight lift from better-than-expected domestic unemployment figures didn't stick, but gold stocks shone.

The S&P/ASX 200 finished 0.73 per cent lower at 6745.9 while the All Ordinaries Index fell 0.63 per cent to 7003.6.

OpenMarkets Group chief executive Ivan Tchourilov said Wall Street was marginally higher overnight as the Federal Reserve left rates on hold as widely expected, while the Federal Open Market Committee reiterated rates would be at near zero until at least 2024.

"It appears the news was already priced into markets, as there was a very muted response … the narrative of rates being 'lower for longer' seems like it's here to stay for the foreseeable future, which should be a net positive for equity markets," Mr Tchourilov said.

The S&P 500 Index finished at a record high, while the Dow Jones closed above 33,000 points for the first time after the quickest 1000 point move on record, CommSec analyst James Tao noted.

 

Locally, jobless figures showing a return to pre-pandemic levels at 5.8 per cent gave the bourse a slight lift before it fell back, Mr Tao said.

Gold was the best performing sector after prices for the precious metal surged.

Silver Lake Resources jumped almost 8 per cent to $1.69, Ramelius Resources rose 7.92 per cent to $1.63, Gold Road Resources advanced 7.33 per cent to $1.24, Westgold Resources appreciated 4.43 per cent to $2.12, Northern Star Resources added 3.2 per cent to $9.36 and Evolution Mining firmed 3.23 per cent to $4.15.

Macquarie researchers listed Evolution, Northern Star and Silver Lake as its top picks among established Australian producers on Wednesday.

The nation's biggest gold miner, Newcrest, put on 3.68 per cent to $25.06.

"Gold is generally seen as a hedge against inflation, so the US Fed decision is certainly giving a big boost for gold miners," Mr Tao said.

The gold sector was by far the strongest. Picture: Rebecca Le May/AAP
The gold sector was by far the strongest. Picture: Rebecca Le May/AAP

However, gold explorer Tulla Resources had a poor debut, opening at 69 cents and closing at 64 cents.

Rio Tinto gave up 0.89 per cent to $110.80 and BHP eased 0.83 per cent to $45.69.

UBS researchers noted on Thursday there was increased volatility in the spot iron ore price due to recent pollution controls in Tangshan, China's top steel producing province, and the local government's plan to cut emissions by about 40 per cent this year.

ANZ softened 0.81 per cent to $28.14, Commonwealth Bank backtracked 1.56 per cent to $85.75, National Australia Bank declined 0.88 per cent to $26.01 and Westpac shed 0.93 per cent to $24.44.

Westpac announced it would sell its Westpac Lenders Mortgage Insurance Ltd to Arch Capital Group at book value, which will be determined upon completion of the deal.

The bank also entered into a 10-year exclusive supply agreement for Arch to provide lenders mortgage insurance to the group.

The value of Westpac’s Arch deal won’t be known until it has been completed. Picture: NCA NewsWire/Luis Ascui
The value of Westpac’s Arch deal won’t be known until it has been completed. Picture: NCA NewsWire/Luis Ascui

NAB joined Westpac in cutting its two-year fixed home loan rate to below 2 per cent, putting pressure on Commonwealth Bank and ANZ to do the same.

NAB is offering 1.89 per cent and Westpac 1.79 per cent, but online-only lender Homestar Finance is leading the market with 1.74 per cent.

Technology stocks were laggards, with buy now, pay later giant Afterpay dropping 1.76 per cent to $111, smaller rival Zip Co sliding 1.4 per cent to $8.47 and online accounting software provider Xero weakening 1.58 per cent to $117.74.

Retailer Harvey Norman firmed 1.94 per cent to $5.79.

New Zealand-based casino operator SkyCity Entertainment retreated 3.11 per cent to $3.12.

The Aussie dollar was buying 78.24 US cents, 56.04 British pence and 65.35 Euro cents in afternoon trade.

 

Originally published as ASX slumps despite strong jobs figures



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