Australian shares slipped 0.5 percent on Wednesday as disappointing Chinese manufacturing data and weak metal prices weighed on miners, but trading was subdued as many investors took to the sidelines ahead of the Federal Reserve meeting result. Global miner BHP Billiton dropped 1.6 percent, while rival Rio Tinto Ltd lost 1.4 percent, deepening their losses after data showed growth in China's manufacturing sector unexpectedly slowed in April.
The weaker official PMI mirrored the HSBC flash PMI figures last week, pointing to below-target growth in the world's second largest economy and Australia's biggest export market. "For Australia, it (China PMI) was more than moderately disappointing. There's been a bit of pressure for the resource stocks as a consequence," said Ric Spooner, a market strategist at CMC Markets in Sydney.
The benchmark S&P/ASX 200 index dropped 25.0 points to 5,166.2, according to the latest data. The market climbed 1.3 percent on Tuesday to close at its highest level in almost five years, led by sharp gains in the financial sector. The downbeat Chinese data fuelled demand concerns for base metals, dragging London copper even lower on Wednesday after it logged its deepest monthly fall in almost a year in April. Analysts said investors were in a wait-and-see mode as the Federal Reserve wraps up a two-day meeting, at which it is widely expected to recommit to its aggressive easing program, or even expand it.
"Traders are cautious with a bit of position squaring going on in advance of some potentially significant events coming up, (like) the Federal Reserve board statement," Spooner said. Investors took profit on the banking sector after the previous session's rally. Australia and New Zealand Banking Group dropped 0.5 percent, while the biggest lender Commonwealth Bank of Australia lost 0.7 percent.
Westpac Banking Corp bucked the trend and gained 0.8 percent ahead of its first-half results due on Friday. "Westpac has been the star of the show today in the financial space, with a few traders taking profits on ANZ and aligning themselves with Westpac before Friday's H2 earnings announcement," IG's chief market strategist Chris Weston said in a client note. Australia's flagship phone company Telstra Corp Ltd continued to push higher, gaining 1.0 percent to a nearly eight-year high of A$5.03, after its deputy chief financial officer said the company was on track to meet its full-year earnings guidance.
The energy sector suffered a broad sell-off on tumbling oil prices. Australia's biggest oil and gas producer Woodside Petroleum Ltd fell 1.0 percent. Whitehaven Coal Ltd declined 2.6 percent, as its majority holder Nathan Tinkler might be forced to sell down his 19 percent stake, now worth A$367 million, to cover his debts and potential penalties.
Liquidators of Tinkler's Mulsanne Resources were given the go-ahead by the court to sue the struggling Australian tycoon for allegedly letting Mulsanne trade while insolvent. Australian building materials maker Boral Ltd ended 1.6 percent lower, after it said it would cut 100 more jobs on top of the job cuts already announced in January, to meet its cost-savings target in a subdued housing construction market. New Zealand's benchmark NZX 50 index edged down 0.2 percent to finish at 4,603.0.
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