Australian shares ended a see-saw trading session slightly lower on Wednesday, as strength in the US dollar and firmer Treasury yields dragged gold miners and tech stocks, and outweighed a rally in the energy sector.
The benchmark S&P/ASX 200 index ended 0.15% lower at 7,399.4, after having added 0.8% on Tuesday.
"I think the main problem is what's happening to bond yields and what's happening to the US dollar; both of them are climbing", said Mathan Somasundaram, CEO of Deep Data Analytics.
US Treasury yields and the greenback reacted to Federal Reserve Chair Jerome Powell being nominated for a second term on Tuesday, reinforcing bets that US interest rates would rise next year.
That weighed on bullion prices, which fell to a three-week low. Local gold stocks shed 1.1%, with Newcrest Mining and SSR Mining leading losses, slumping 1.2% and 0.9% respectively.
Tech stocks too bore the brunt of a selloff in their US counterparts overnight.
Heavyweights Afterpay and Wisetech Global fell 0.2% and 2.4% respectively. Software maker TechnologyOne slid 8.6% in its worst day since May 2019, hurt by a rating downgrade from brokerage Jefferies.
Energy stocks remained strong despite uncertainty in oil prices as various countries agreed to release stockpiles of crude to cool prices. The index was up 1.2%.
Somasundaram is bullish on the sector, saying the release of strategic stockpiles do not address oil prices in the medium term in a market that looks forward.
New Zealand's benchmark S&P/NZX 50 rose 0.62% to 12,766.79 after its government said it would reopen the country to foreign travellers from April next year.
The gains came despite the central bank lifting interest rates for the second time in as many months amid rising inflationary pressures and easing coronavirus curbs.
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