The Australian share market has dropped to a one-month low, with losses across the board after European Central Bank officials pushed back against expectations for interest rate cuts.
The benchmark S&P/ASX200 index on Tuesday closed down 81.5 points, or 1.09 per cent, to 7,414.8, its lowest finish since December 14.
The broader All Ordinaries dropped 83 points, or 1.07 per cent, to 7,647.1.
The losses came after European Central Bank council member Robert Holzmann warned at the World Economic Forum in Davos, Switzerland, that people expecting a rate cut in April "will be deeply disappointed".
"I cannot imagine that we'll talk about cuts yet because we should not talk about it," Holzmann told CNBC.
"Everything we have seen in recent weeks points in the opposite direction so I may even foresee no cut at all this year."
His comments came even as Germany's national statistics office reported reported a 0.3 per cent fall in gross domestic product in 2023, raising fears about the state of the global economy.
There was also bad news domestically, with the Westpac-Melbourne Institute's monthly survey finding that sentiment had worsened in January in the worst start to a new year since the recession of the early 1990s.
"For consumers, the new year looks to have picked up where the old one left off: cost of living and high interest rates continuing to dominate and sentiment bumping around deeply pessimistic levels," Westpac senior economist Matthew Hassan said.
All 11 sectors finished lower on Tuesday, with energy, materials, consumer staples, health care and utilities each falling more than one per cent.
Utilities were the biggest loser, dropping 1.8 two per cent as Origin Energy fell 2.4 per cent.
In the heavyweight mining sector, BHP fell 1.4 per cent to $46.50, Fortescue dropped 2.2 per cent to $26.65 and Rio Tinto dipped 1.3 per cent to $126.66 as the iron ore giant reported its iron ore production was down two per cent in the fourth quarter.
Goldminers and lithium producers were also mostly lower, with Northern Star dropping 1.9 per cent, Evolution falling 3.4 per cent and Arcadium Lithium retreating 1.7 per cent.
The big four banks finished in the red, with Westpac down 0.9 per cent to $23.07, ANZ dipping 0.8 per cent to $25.74, NAB down 0.7 per cent to $30.73 and CBA finishing 0.6 per cent lower at $113.00.
Lovisa was the biggest loser in the ASX200, falling 5.2 per cent. Just 26 of the 200 companies in the index finished in the green.
Energy Resources of Australia soared 20.3 per cent to 7.1c, apparently on hopes that its Jabiluka uranium deposit in the Northern Territory might somehow be mined amid soaring uranium prices.
ERA and its majority owner, Rio Tinto, have pledged that Jabiluka - one of the world's largest uranium deposits, worth tens of billions of dollars - will never be mined as long as the land's traditional owners are opposed to a development.
The Mirarr people say that will never happen.
The Australian dollar was also at a one-month low, buying 66.12 US cents, from 66.87 US cents at Monday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Tuesday dropped 81.5 points, or 1.09 per cent, at 7,414.8
* The broader All Ordinaries fell dropped 83 points, or 1.07 per cent, to 7,647.1
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.12 US cents, from 66.87 US cents at Monday's ASX close
* 96.66 Japanese yen, from 97.11 Japanese yen
* 60.58 Euro cents, from 60.99 Euro cents
* 52.14 British pence, from 52.42 pence
* 107.26 NZ cents, from 107.40 NZ cents
