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Share market falls to eight month low

Trevor Chappell
AAP

The share market has fallen for a second straight session as international investors sold shares on concerns about a weaker outlook for the Australian dollar.

The benchmark S&P/ASX200 stock index dropped 0.9 per cent to 5,652.1 points, its lowest level since February 8.

CMC Markets chief market strategist Michael McCarthy said the recent selling in the share market, amid low volumes, appeared to be currency related.

He said the potential for a stronger US dollar was prompting strategists to lower their targets for the Australian dollar, making local shares unattractive.

"The shift in the outlook for the Australian dollar is I believe weighing on the local market," Mr McCarthy said.

"With so many strategists shifting their view on the Aussie from up to somewhere between 80 and 84 (US) cents to now down to somewhere between 76 and 72 (US) cents, we've got a lot of reasons for international investors to bale out or even short."

The Australian dollar rebounded from Tuesday's fall, prompted by the Reserve Bank's monetary policy statement, to be trading at 78.67 US cents at 1700 AEDT, from 77.92 US cents on Tuesday.

Mr McCarthy said trading on the share market was thin on Wednesday, amid school holidays in many states, and holidays in China, meaning little guidance for iron ore markets.

The major banks fell, with ANZ the weakest performer, dropping 2.1 per cent to $29.24.

QBE Insurance bounced back from its fall on Tuesday when it said recent hurricanes and earthquakes would dent its earnings, gaining 2.7 per cent to $10.09.

BHP Billiton lost 0.6 per cent to $26.00, Rio Tinto dropped 1.5 per cent to $67.43 and Fortescue Metals surrendered 2.1 per cent to $5.15.

Weaker oil prices hit the energy companies, with Woodside Petroleum stepping back 1.1 per cent to $28.70 and Santos one per cent weaker at $3.97.

ON THE ASX:

* The benchmark S&P/ASX200 dropped 49.3 points, or 0.86 per cent, to 5,652.1 points.

* The broader All Ordinaries index dropped 44.6 points, or 0.77 per cent, to 5,719.6 points.

* The SPI200 futures contract was down 51 points, or 0.9 per cent, at 5,628 points.

* National turnover was 2.9 billion securities traded worth $5.9 billion.

CURRENCY SNAPSHOT AT 1700 AEDT:

One Australian dollar buys:

* 78.67 US cents, from 77.92 US cents on Tuesday

* 88.55 Japanese yen, from 88.17 yen

* 66.83 euro cents, from 66.56 euro cents

* 59.26 British pence, from 58.81 pence

* 109.47 NZ cents, from 108.88 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEDT was $US1,276.34 per fine ounce, up from $US1,269.35 per fine ounce on Tuesday.

BOND SNAPSHOT AT 1630 AEDT:

* CGS 4.50 per cent April 2020, 2.0182pct, from 2.0364pct on Tuesday

* CGS 4.75pct April 2027, 2.7562pct, from 2.7894pct

Sydney Futures Exchange prices:

* December 2017 10-year bond futures contract at 97.165 (implying a yield of 2.835pct), from 97.13 (2.87pct) on Tuesday

* December 2017 3-year bond futures contract at 97.84 (2.16pct), from 97.82 (2.18pct).

(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)