Missile launch grounds share market

THE Australian share market closed lower yesterday for a third consecutive session as North Korea’s latest missile launch over Japan spooked investors.

The benchmark ASX 200 index shed 43.7 points, or 0.8 per cent, to 5695 points, with the mining and banking sectors both weaker.

The broader All Ordinaries index was off 42.5 points, or 0.7 per cent, at 5755.9.

OptionsXpress market analyst Ben Le Brun said the miss- ile launch early yesterday morning had a significant effect.

“The market has reacted to the news first thing this morning about North Korea lobbing another missile over Japan,” Mr Le Brun said.

He said the market reaction to the latest missile test may not last long because the US futures market, which had started in a very negative mood, had begun to show some improvement.

“And of course we’ve been down this path many times before, and all it’s proven to be is a good buying opportunity.”

The big miners were hit after the price of iron ore dropped more than $US2 a tonne overnight on Thursday following data indicating further softening in the growth of China’s infrastructure.

BHP dropped 63c, or 2.3 per cent, to $26.26, and Rio Tinto fell $1.57, or 2.3 per cent, to $66.81.

Fortescue Metals lost 26c, or 4.5 per cent, to $5.55 after the company said chief Nev Power would step down in February.

In the energy sector, Woodside Petroleum eased 14c to $28.40 and Santos dumped 3c to $3.91, but Oil Search gained 2c to $6.80.

Westpac was the worst of the big four banks, drifting 38c, or 1.2 per cent, to $31.44.

Qantas Airways was down 7c, or 1.2 per cent, at $5.82 as it revealed chief Alan Joyce’s annual pay had soared to $24.6 million.