More rate rises foreseen so investors start selling

Australian shares closed lower yesterday because believe the Reserve Bank could lift interest rates again later this year.
Investors started selling after better than expected retail figures fanned the prospect of further increases and after the Reserve Bank of Australia lifted official rates by a quarter of a percentage point to 6 per cent.
At the 4.15pm close the ASX200 index was down 49.8 points at 4931.5, while the All Ordinaries had fallen 47.3 to 4906.6.
On the Sydney Futures Exchange, the September share price index contract was down 62 points to 4907 on a volume of 23,649 contracts.
"The overall view is that we're facing a round of interest rate rises," ABN Amro Morgans private client adviser Bill Bishop said.
"We're coming to terms with the fact that the long regime of low interest rates may be about to close and the market is reacting accordingly."
Strong economic activity and rising inflation led the Reserve Bank to lift the official cash rate in what was a widely expected move, just three months after the central bank raised rates by 25 basis points to 5.75 per cent.
However, the surprise in retail trade figures for the month of June - sales were up 1 per cent against market expectations of a 0.5 per cent gain - prompted investors to consider that the bank would lift interest rates again, perhaps as early as September.
Interest rate concerns afflicted Wall Street on Tuesday too, with news of an uptick in inflation strengthening expectations that the US Federal Reserve would increase interest rates again.
A US government report on spending showed a key inflation measure (consumer spending) rose in June, while a separate survey showed prices paid by manufacturers in July at their highest in nine months.
The Dow Jones industrials fell 59.95 points to 11,125.73.
On the local bourse, the big banks were a mixed bag as they started reviewing their lending and deposit rates in the wake of the Reserve's announcement. NAB slipped 24c to $35.66 and Westpac fell 7c to $22.01. The CBA rose 8c to $45.13 and the ANZ was steady at $25.55.
In the resource sector, BHP Billiton sank 45c to $27.15 and Rio Tinto shed 9c to $74.66.
Woodside Petroleum continued its dive after coming up with a duster off Mauritania, falling 61c to $41.72. Oil Search, though, was up 2c at $4.03.
Retailers were also lower despite the bounce back in retail turnover in June. Coles Myer dipped 30c to $10.60, Woolworths fell 15c to $18.85 and David Jones fell 2c to $3.04.
Among media stocks, Publishing and Broadcasting dropped 31c to $16.99. News Corp stock eased 32c to $25.89 and its preferreds fell 21c to $24.88. Fairfax was treading water at $3.98.
Telstra inched forward 2c to $3.87. It was the top traded stock by volume with 38.29 million shares worth $148 million changing hands.
Communications Minister Helen Coonan urged Telstra to speed up talks with the competition watchdog on regulations that, in turn, would clear the way for the Government to sell the public shareholding in Telstra.
Singapore Telecommunications was steady at $2.15 despite subsidiary Optus reporting a dramatically reduced take-up rate of new customers.
Qantas descended 4c to $3.03 and rival Virgin Blue dipped 5c cents to $1.60.
At 4.51pm the spot price of gold in Sydney was $US647.50, up $US15.35 on yesterday's close.
Among the goldminers, Newmont rose 5c to $6.72 and Newcrest was steady at $19.30.
Market turnover totalled 1.03 billion shares valued at $4.66 billion, with 622 stocks down, 400 up and 320 unchanged.