The Australian share market has dipped further after stronger-than-expected retail sales data in the United States overnight further dimmed hopes for quick interest rate cuts in the world's biggest economy.
The S&P/ASX200 index on Thursday finished down 46.6 points, or 0.63 per cent, to a fresh five-week low of 7,346.5.
The broader All Ordinaries fell 41.3 points, or 0.62 per cent, to 7,575.6.
Overnight the US Commerce Department reported reported stronger consumer spending momentum in December than economists had projected, diminishing the chances for the quick interest rate cuts many traders have been hoping for.
The market's implied odds for the Fed to cut rates at its March 20 meeting fell to 57.7 per cent, from 63.1 per cent a day earlier, according to the CME FedWatch Tool.
Domestically, the Australian Bureau of Statistics reported the unemployment rate remained steady at 3.9 per cent in December, but employment fell by 65,000.
"The softening in the labour market is now undoubtedly well underway," wrote Ben Udy, lead economist for Oxford Economics Australia.
But the unemployment rate is only a touch above the RBA's November forecasts, so the implications for monetary policy are limited, he added.
Nine of the ASX's 11 sectors finished lower on Thursday, with property the biggest laggard, falling 2.3 per cent as Westfield owner Scentre Group dropped 2.4 per cent and shopping centre owner GPT retreated 2.9 per cent.
In the heavyweight mining sector, BHP fell 1.8 per cent as the Big Australian lowered full-year production guidance for its central Queensland coal operations after a "tough six months" for the half-year ended December 31.
BHP also said it was evaluating options at its Nickel West operations in WA to mitigate the impacts of the sharp fall in nickel prices, with a further update expected next month.
Elsewhere in the sector, Fortescue rose 1.0 per cent to $27.05, Rio Tinto added 0.3 per cent to $126.86 and South32 dropped 2.4 per cent to $3.21.
Also, Liontown Resources plunged 10.6 per cent to a one-year low of $1.215 after NYSE-listed lithium giant Albemarle sold its four per cent stake in the lithum developer, following the October collapse of its $6.6 billion takeover bid.
In the energy sector. Ampol retreated 2.5 per cent to $35.07 as the petrol station owner said an unplanned outage in December had caused a drop in volumes at its Lytton refinery in Queensland.
The Big Four banks were mostly higher, with NAB gaining 0.5 per cent to $30.89 and CBA and ANZ both edging up 0.1 per cent, at $112.48 and $25.79, respectively. Westpac was the outlier, dipping 0.2 per cent to $22.85,
Insurance companies - whose bottom lines are generally boosted by higher interest rates - were mostly in the green, with IAG rising 1.1 per cent, Suncorp up 1.2 per cent, NIB adding 2.3 per cent and QBE advancing 0.5 per cent.
EML Payments jumped 22.2 per cent to a two-month high of 91c after the Brisbane-based prepaid card company announced it would wind down its loss-making operations in Ireland, a business it said was no longer commercially viable.
On the flip side, Perth-based employment services provider APM Human Services plunged 40.8 per cent to an all-time low of 78.5c following a trading update.
Historically low levels of unemployment in Australia and the United Kingdom have meant lower volumes of job-seeker placements in programs it runs for government agencies, APM said.
The Australian dollar was buying 65.52 US cents, from 65.58 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday dropped 46.6 points, or 0.63 per cent, at 7,346.5
* The broader All Ordinaries fell 46.9 points, or 0.62 per cent, to 7,575.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.52 US cents, from 65.58 US cents at Wednesday's ASX close
* 96.97 Japanese yen, from 96.80 Japanese yen
* 60.15 Euro cents, from 60.37 Euro cents
* 51.67 British pence, from 52.02 pence
* 107.16 NZ cents, from 107.06 NZ cents
