THE share market closed weaker as a lower than expected first half profit from the ANZ pulled back the financial sector and continued sovereign debt worries in Europe affected resources stocks.
At the 16:15 (AEST) close, the benchmark S&P/ASX200 index had fallen 37.2 points, or 0.77 per cent, to 4785.6 points, while the broader All Ordinaries index had dipped 38.1 points, or 0.78 per cent, to 4816.1 points.
On the Sydney Futures Exchange, the June share price index futures contract was off 35 points at 4791 points on volume of 30,636 contracts, according to preliminary calculations.
CMC Markets market strategist David Taylor said a credit downgrade for Spain, following downgrades for Greece and Portugal, had made equity markets nervous even though Spain's position was not as bad as that of Greece.
"The sovereign debt contagion is still plaguing the market and fraying nerves,'' Mr Taylor said.
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"Commodities were sold off on the back of that, and our resources stocks fell through.''
Mr Taylor said a disappointing first half earnings report from ANZ pulled back the financial sector.
Mr Taylor said investors were disappointed by ANZ's dividend and also expected a greater rise in the bank's earnings.
Among the major banks, ANZ was 65 cents lower at $24.20 after it increased first half profit by 36 per cent, benefiting from economic recovery in Asia and Australia.
Commonwealth Bank surrendered 16 cents to $57.57, Westpac dumped 14 cents to $27.00 and NAB retreated 41 cents to $28.01.
In the resources sector, global mining giant BHP Billiton weakened 57 cents to $40.50 and rival Rio Tinto sagged $1.85 to $72.59.
Iron ore miner Fortescue Metals Group shed 11 cents to $4.73 as it was made to pay shipping contractor Zodiac Maritime millions in compensation, after losing a court battle in the United Kingdom.
Atlas Iron backtracked 18 cents to $2.51 as it tapped the market for $63.5 million to boost production and shipments later this year.
Oil and gas producer Woodside Petroleum dropped 40 cents to $45.35 and Santos eased 19 cents to $13.53.
On Wall Street overnight, the Dow Jones Industrial Average index rose 53.28 points, or 0.48 per cent, to 11,045.27 points.
In the gold sector, Lihir was six cents lower at $3.86 and Newcrest descended 61 cents to $33.62.
The price of gold in Sydney at 16:20was $US1166.20 per fine ounce, up $US1.40 on yesterday's closing price of $US1164.80.
Telstra lost three cents to $3.16, and Optus-owner Singapore Telecommunications stepped back three cents to $2.38.
Retailer Woolworths added eight cents to $26.91 and Wesfarmers, which owns Coles, climbed eight cents to $29.83.
In the media sector, News Corp (the parent company of the publisher of news.com.au) fell 19 cents to $19.36 and its non-voting stock ejected eight cents to $16.98.
Consolidated Media scraped off one cent to $3.14 and Fairfax nudged up one cent to $1.735.
Economy picks up with service sector growth, more home contractsShares close higher as miners gain
