Aust stocks dip as Ukraine war escalates

The local share market has closed lower, with investors apparently treading cautiously as the war in Ukraine threatened to spill across the border into Poland.

The benchmark S&P/ASX200 index on Wednesday finished down 19.4 points, or 0.27 per cent, to 7122.2, while the broader All Ordinaries fell 18 points, or 0.25 per cent, to 7327.4.

"There's lots going on, that's for sure," Saxo Markets Australian market analyst Jessica Amir told AAP. 

In the Polish village of Przewodów, two people were killed when a projectile struck an area 5km from the Ukrainian border, in what Poland's president said was "most likely" a Russian made missile.

"This kind of brought up a bit of uncertainty, particularly because there's a worry that tension would spread, and that flowed into commodity markets," Ms Amir said.

On the flip side, cooler-than-expected US producer price index figures released overnight corroborated last week's consumer price index data showing that price increases are finally decelerating.

"Sentiment lifted because we had another inflationary read that came out in favour of the Fed actually pivoting and moving from an aggressive stance to dovish," Ms Amir said. "And that would support an equities rally."

The US dollar fell to a three-month low against a basket of other currencies, which also helped to boost commodities, given they are generally priced in the greenback.

Woodside gained 1.4 per cent to $39.07, Whitehaven Coal added 5.8 per cent to $8.71 and New Hope rose 4.1 per cent.

The mining sector was up 0.7 per cent, with BHP adding 1.2 per cent to $44.45, Fortescue Metals rising 2.3 per cent to $19.85 and Rio Tinto up 1.6 per cent to $108.07.

Lithium miners recovered a little after Tuesday's sharp losses, with Pilbara adding 1.9 per cent, Allkem up 2.4 per cent and IGO climbing 4.0 per cent.

OZ Minerals was in a trading halt pending an announcement "in relation to a potential change of control transaction".

The Adelaide-based gold and copper miner in August rejected an unsolicited $8.4 billion takeover offer from BHP, and there has been speculation that the Big Australian would return with a higher bid.

Nufarm soared 8.9 per cent to $5.90 in its best day since February, after the agricultural chemicals company announced that its full-year net profit after tax was up 65 per cent to $107.4m.

"Favourable seasonable conditions and attractive soft commodity prices generated strong demand for our seeds and crop protection prices," said managing director and chief executive Greg Hunt, who added that the conditions remained favourable heading into 2022/23.

All of the big banks lost ground, with CBA faring the worst, down 1.8 per cent to $104.58. NAB declined 0.6 per cent to $30.31, Westpac dropped 0.5 per cent to $23.84 and ANZ dipped 0.3 per cent to $24.16.

Insurance companies also had a down day, with IAG dropping 2.3 per cent, QBE 2.9 per cent and Suncorp 0.9 per cent.

Medibank Private fell 0.7 per cent to $2.79 as the health insurer told shareholders at its annual general meeting that last month's cyberattack would cost it up to $35m.

Aristocrat Leisure was down 5.0 per cent to $35.98 as the gaming company delivered a $948.5m full-year net profit after tax.

Buy now, pay later companies gained ground after Sezzle reported that October was its second-best month ever in terms of revenue, even as it cut costs.

Sezzle rose 15 per cent to 61.5c, SplitIt climbed 13.8 per cent to 16.5c and Zip Co, which also announced a partnership with eBay, added 12.1 per cent to 78.5c.

Locally, the Australian Bureau of Statistics released data showing Australian wages increased faster than expected in the September quarter.

"It's basically showing us that inflation is, I guess, a bit more sticky, but the good news is, it didn't really move the market too much," Ms Amir said.

It was the third straight day of losses for the ASX200, although the index is only down 0.5 per cent for the week.

In currency, the Australian dollar was close to a two-month high against its US counterpart.

The Aussie was buying 67.61 US cents, from 67.06 US cents at Tuesday's ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index on Wednesday dropped 19.4 points to 7122.2, a 0.27 per cent decline.

* The broader All Ordinaries dropped 18 points to 7327.4, a 0.25 per cent decline.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.61 US cents, from 67.06 US cents at Tuesday's close

* 94.53 Japanese yen, from 94.13 yen

* 65.21 Euro cents, from 64.93 euro cents

* 56.95 British pence, from 56.98 pence

* 109.80 NZ cents, from 109.64 NZ cents.