SYDNEY, Feb. 28 (Xinhua) -- The Australian stock market opened lower on Wednesday, amid signs of an uptick in U.S. bond yields following hawkish comments from the new U.S. Federal Reserve chairman.
At 10:16 (AEDT), the benchmark S&P/ASX 200 index was down 18.2 points or 0.3 percent at 6,038.7, while the broader All Ordinaries index lost 23.3 points or 0.38 percent at 6,136.
The Congressional testimony of new U.S. Federal Reserve chairman Jerome Powell was "sufficiently hawkish to drive a tick up in bond yields and a down draft in equities" and would "drive a lower open for the ASX 200 index and other Asian markets this morning," CMC Markets chief market analyst Ric Spooner said in a morning note to investors.
"Markets took note of Mr. Powell's personal view that the outlook of the U.S. economy had improved since December and that tax cuts, combined with increases in government spending caps would see a meaningful increase in demand growth for the next couple of years."
Latest U.S. figures "generally supported" Powell's views, with house price rises continuing to "run well ahead of both inflation and wage growth. U.S. consumer confidence is at stellar levels supported by an improving labour market; tax cuts; low interest rates and rising asset values," said Spooner.
Still, U.S. bond yields remain below the highs of last week and the new Fed head's comments "have not yet been enough to move bonds out of their recent range trading. It remains to be seen whether markets will require more evidence on inflation to push yields meaningfully higher."
Powell's comments also led to further strengthening of the greenback, with commodity prices being sold and pointing to "a negative for mining and energy stocks this morning."
The big banks opened lower, with ANZ edging down 0.03 percent, Commonwealth Bank slipping 0.38 percent, and both the National Australia Bank and Westpac shedding 0.23 percent.
Mining giant BHP Billiton was down 0.55 percent and rival Rio Tinto dipped 0.42 percent. Newcrest Mining fell 1.06 percent. Santos and Oil Search both slipped 0.6 percent. Woodside Petroleum was down 0.45 percent. Wesfarmers gained 0.54 percent and rival supermarket chain Woolworths added 0.18 percent.
National carrier Qantas soared 2.11 percent, telco giant Telstra fell 3.58 percent and biomed group CSL dipped 0.14 percent.
