“There is a general concern to see how well everything squares off at the year’s end in the United States and that particularly points to the repo market,” said Brad Smoling, managing director at Smoling Stockbroking.
The US Federal Reserve, earlier in the month, injected additional liquidity of $500 billion, as demand for funds to settle Treasury purchases and pay corporate taxes outweighed loans available.
The shortage had put pressure on US repo rates in September when interest rates in US money markets shot up to as high as 10 per cent for some overnight loans, more than four times the Fed’s rate.
“If there is not enough liquidity available from the Fed for the end of the year for corporations and banks to balance books, that could cause a problem,” Mr Smoling added.
Mining giant BHP was down 0.98 per cent to $39.25 and Rio Tinto falling 1.33 per cent to $101.145.
South32 fell 1.82 per cent to $2.69, Fortescue Metals was 0.82 per cent lower at $10.91, and BlueScope Steel dropped 1.17 per cent to $15.22.
The big four banks were all lower, with ANZ down 0.69 per cent at $24.61, Commonwealth Bank down 0.49 per cent to $80.71, NAB dipping 0.62 per cent to $24.775, and Westpac down 0.21 per cent to $24.28.
Shares in real estate groups Stockland, Mirvac, Dexus, GPT Group, and Vicinity Centres – all of which went ex-dividend on Monday – fell by between 0.76 per cent and 2.11 per cent.
Toll road operator Transurban, Sydney Airport, and pipeline company APA also slipped, down by between 2.33 per cent and 3.98 per cent after delivering shareholders’ payouts.
Energy stocks were mostly in the red, with Woodside, Oil Search, Origin, and Santos down by between 0.41 per cent and 1.21 per cent.