Signs of dissension in the world’s most powerful central bank unnerved investors and pushed the Australian sharemarket into the red for the third straight session.
Following the weak overnight lead from Wall Street the S&P/ASX 200 index lost 18.3 points, or 0.35 per cent, to 5234.2 points, with comments from Dallas Fed president Richard Fisher further muddying communications since its shock decision to maintain the $US85 billion a month bond purchasing program.
In a speech yesterday Mr Fisher said the decision last week was “very close and tough” and it undermined the Fed’s credibility.
He added that the White House had mishandled Fed succession, and that although deputy chairman Janet Yellen was a “seriously wonderful woman”, she’s “dead wrong on policy”.
New York Fed president William Dudley said the US economy still needed the support of a very accommodative monetary policy.
“There appears little doubt that Dudley will be one of the last voting for tapering and for rate hikes, but improvement in the housing market outlook and Congress moving through the current round of fiscal debate are likely to be key factors in the QE tapering process,” Royal Bank of Scotland currency strategist Greg Gibbs said.
“As such, December is certainly a significant possibility as a start date.”
The US S&P 500 index lost per cent, but benchmark US 10-year yields slipped 3 points to 2.70 per cent, while Australian 10-year yields fell 6.4 points to 3.904 per cent.
The Australian dollar eased to US94.15¢.
“Individual asset classes are each marching to their own drum and may well continue to do so this side of next Friday’s US payrolls report,” National Australia Bank global head of currency strategy Ray Attrill said.
The Shanghai composite index was off 0.5 per cent at the close of the ASX on fears of further property taxes to curb speculation.
In Tokyo the Nikkei index was marginally firmer.
Gold edged up $US6 to $US1327 an ounce, copper slipped 0.3 per cent to $US7220 a tonne and yesterday spot iron ore rose 0.4 per cent to $US132.20 a tonne.
The broader All Ordinaries index was down 16.3 points, or 0.31 per cent, at 5229.5.
On the ASX 24, the December share price index futures contract was 27 points lower at 5236, with 13,604 contracts traded.
BHP Billiton shed 23 cents to $35.87, Rio Tinto dropped 47 cents to $62.10, and gold miner Newcrest lost 12 cents to $11.91.
The major banks were all weaker, with ANZ down 20 cents to $30.99, National Australia Bank off 21 cents to $34.62, Commonwealth Bank down 61 cents at $72.90 and Westpac was six cents lower at $32.74.
PhillipCapital head of private wealth Andrew Sekely said the local market managed to stage a slight recovery from its early lows in afternoon trade.
"The market’s behaving itself pretty well, I’m not particularly worried about it,” he said.
"In fact, from its lowest point it’s recovered by about 20 points."
Iron ore miner Fortescue Metals bucked the wider trend, gaining 13 cents to $4.72.
It announced it had seized control of ore processing operations amid safety worries at a Pilbara mine where a worker died in August.National turnover was 1.3 billion securities worth $3 billion.