The Australian share market has closed lower, with the major banks losing much of their previous day's gains after NAB cut its dividend.
The benchmark S&P/ASX200 index finished down 37.5 points, or 0.59 per cent, to 6,338.4 points at 1615 AEST on Thursday, while the broader All Ordinaries was down 36.5 points, or 0.56 per cent, to 6,430.
The local currency slumped against the US dollar early on Thursday morning after the Federal Reserve held interest rates steady and indicated there would be no change either way any time soon.
"A very disappointing day for Australian investors," said CMC Markets chief market strategist Michael McCarthy.
After making up all of its losses from late last year the market has again pulled back rather than set new 11-year highs, which is concerning from a technical standpoint and could signal a reversal in optimism, Mr McCarthy said.
While ANZ delivered a strong earnings result on Wednesday, NAB disappointed investors on Thursday by cutting its dividend 16 per cent to its lowest level in almost nine years.
The financial sector fell 1.08 per cent overall, with Westpac down 2.59 per cent to $27.41, Commonwealth down 0.85 per cent to $74.86, ANZ down 2.43 per cent to $27.27 and NAB down 0.31 per cent to $25.70.
AMP also announced that it had experienced net cash outflows of $1.8 billion in the first quarter, sending the stock down as much as five per cent before it recovered somewhat after the board was spared a second strike on executive pay.
Shares in the wealth manager finished down 2.6 per cent, to $2.25.
Pendal Group shares dropped 12.99 per cent to $8.04, a two-month low, after the investment management business announced a 26 per cent drop in profit for the half year that ended March 31, to $84.5 million.
A few sectors gained ground.
Health care was up 0.46 per cent, with sector heavyweight CSL gaining 0.43 per cent to $201.25.
Consumer staples gained 0.12 per cent, buoyed by Woolworths, which gained 0.81 per cent to $32.23 after the supermarket giant lifted third-quarter grocery sales by 4.2 per cent.
The materials sector dropped 0.68 per cent, with BHP down 1.23 per cent to $37.02 and Rio Tinto down 1.18 per cent to $94.45.
Kidman Resources soared 44.96 per cent to $1.87 after the lithium miner's board said it was in favour of a proposal from Wesfarmers to buy it for $1.90 a share, or $776 million.
Wesfarmers stock was down 0.39 per cent to $35.65.
Villa World was up 3.64 per cent to $2.28 after the property developer received a sweetened takeover offer from AVID Property Group Australia.
The Aussie dollar is buying 70.19 US cents, from 70.49 US cents on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 index dropped 37.5 points, or 0.59 per cent, to 6,338.4 points at 1615 AEST on Thursday
* The All Ordinaries gained 36.5 points, or 0.56 per cent, to 6,430.
* At 1630 AEST, the SPI200 futures index was flat at 6,321.
CURRENCY SNAPSHOT AT 1630 AEST:
One Australian dollar buys:
* 70.19 US cents, from 70.49 on Wednesday
* 78.31 Japanese yen, from 78.63
* 62.72 euro cents, from 62.84
* 53.78 British pence, from 54.06
* 105.91 NZ cents, from 106.03
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