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(Australian Associated Press)
Broad-based selling has continued for a second consecutive day on the ASX as fears of a US credit default and energy shortages in China add to economic uncertainty.
The market was down as much as about 1.75 per cent on Wednesday, before recovering some losses by the close of trade.
ASX technology shares fared worst following a rout on the US Nasdaq.
There were also steep losses for healthcare and energy shares.
Market giant CSL has lost more than eight per cent this week and fell to its lowest price since July.
The heavyweight banks and miners fared a little better but were still lower. The Commonwealth Bank and BHP were the only majors to lose more than one per cent.
The benchmark S&P/ASX200 index closed lower by 78.9 points, or 1.08 per cent, to 7196.7.
The All Ordinaries closed down 80.9 points, or 1.07 per cent, to 7500.2.
IG Markets analyst Kyle Rodda said there was a list of factors making investors steer clear of risk.
US Treasury Secretary Janet Yellen warned the nation was moving closer to exhausting its borrowing capability which could cause a government shutdown and serious harm to the economy.
Politicians cannot agree whether to extend the US debt limit.
US Treasury yields kept rising as inflation expectations increase. Some fear the US Federal Reserve could shorten its timeline for tightening its monetary policy.
Meanwhile in China, a shortage of electricity is paralysing parts of the economy.
A shortage of coal and strong demand from manufacturers has left electricity providers unable to keep up.
Public holidays are making it harder to learn whether troubled property giant Evergrande will pay its debts.
On the ASX, one of the biggest movers was fleet management provider Smartgroup.
A group of would-be investors have offered to buy all shares for $10.35 each, a 31 per cent increase on Tuesday’s closing price.
The investor group of TPG Global and Potentia Capital will have four weeks to consider the financials of Smartgroup.
Shares were up more than 18 per cent to $9.28.
Energy provider APA Group has extended the time for Victorian electricity provider AusNet to consider its takeover offer.
APA has offered $2.60 per share which it claims is superior to Brookfield Asset Management’s bid of $2.50 per share.
Brookfield is still examining the financials of AusNet under an exclusivity deal.
APA shares were down 0.12 per cent to $8.58.
AusNet shares were up 0.79 per cent to $2.56.
The Reserve Bank urged the market operator to recruit more skills for the revamp of its technology platforms.
The central bank said the ASX board had gaps in skills and experience, and needed to clarify accountability.
ASX leaders pledged to do so during the company annual general meeting.
Shares were down 0.7 per cent to $80.89.
Explosives provider Orica revealed full-year earnings will be weighed down by about $370 million in major items.
The chief item was a writedown of up to $270 million on an ammonium nitrate plant in Western Australia.
Shares were up almost three per cent to $12.04.
The Australian dollar was buying 72.40 US cents at 1720 AEST, lower from 72.97 US cents at Tuesday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed lower by 78.9 points, or 1.08 per cent, to 7196.7 on Wednesday.
* The All Ordinaries closed down 80.9 points, or 1.07 per cent, to 7500.2.
* At 1720 AEST, the SPI200 futures index was up 21 points, or 0.29 per cent, at 7197 points.
One Australian dollar buys:
* 72.40 US cents, from 72.97 cents on Tuesday
* 80.67 Japanese yen, from 80.95 yen
* 62.09 Euro cents, from 62.24 cents
* 53.59 British pence, from 53.15 pence
* 104.37 NZ cents, from 104.10 cents.