ASX sold lower on eve of US Fed decisions: Wednesday 15 December

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Steven Deare
(Australian Associated Press)

 

Shares had their biggest loss on the Australian market in more than two weeks as investors brace for the final US Federal Reserve decisions of the year.

A fall of 0.7 per cent on Wednesday followed eventful corporate activity, such as a rebuke for Westpac leaders and Wesfarmers trying to stop a takeover by Woolworths.

Yet attention was largely on the outcomes of the US central bank meeting, to be revealed on Thursday.

The bank will reveal its plan to ease bond-buying, which has helped prop up the economy during the pandemic. It will also likely forecast higher inflation and rate hikes next year.

Burman Invest chief investment officer Julia Lee said while investors were prepared for bond-buying to ease, the main questions were about rate hikes.

She expected investors on markets would respond negatively if the Federal Reserve flagged more or earlier rate hikes than it did last time.

Almost all ASX share categories were lower with technology stocks faring worst.

The benchmark S&P/ASX200 index closed down 51.3 points, or 0.7 per cent, to 7327.1 points.

The All Ordinaries closed lower by 62.1 points, or 0.81 per cent, to 7636.2 points.

In Australia, international students and skilled workers can return following eased coronavirus restrictions.

This is despite concerns about the Omicron variant spread and rising infection numbers in some states.

Disgruntled Westpac investors cast a “first strike” on executive pay, upset about the latest scandal involving poorly maintained systems and controls.

Shareholders used their vote at the annual general meeting to show their displeasure at failures which cost customers, and will lead to a fine of about $100 million.

Westpac, ANZ and NAB each gained less than half a per cent. The Commonwealth fared worst of the big four and dropped 0.63 per cent to $96.93.

Wesfarmers will use its shares in Australian Pharmaceutical Industries to vote against a Woolworths takeover.

The API board has said Woolworths’ $872 million ($1.75 per share) offer was superior to the Wesfarmers bid ($1.55 per share).

Wesfarmers has the right to match the offer.

Shares in the company were little changed at $58.46.

Woolworths slipped 0.13 per cent to $37.40.

Corporate Travel Management is buying Helloworld Travel’s corporate business in Australia and New Zealand.

The $175 million buy will be helped by a $100 million share sale.

Corporate Travel Management will also give Helloworld investors $75 million in shares.

Helloworld was higher by 16 per cent to $2.66.

Shares in Corporate Travel Management were paused from trading.

CSL shares also remained paused as leaders work on a $16.4 billion takeover bid for iron deficiency specialist Vifor Pharma of Switzerland.

A $6.3 billion share sale would help fund the buy.

In mining, Rio Tinto was best of the majors and climbed 0.24 per cent to $98.34. BHP and Fortescue each lost no more than half a per cent.

Some of the high profile technology shares to lose most value were Appen and Altium. Each lost a little more than four per cent.

Gold miners also had a bad day. Evolution lost about five and a half per cent to $3.79. Northern Star fell 3.27 per cent to $8.88.

The dollar was buying 71.16 US cents at 1713 AEDT, higher from 71.00 US cents at Tuesday’s close.

ON THE ASX

* The benchmark S&P/ASX200 index closed down 51.3 points, or 0.7 per cent, to 7327.1 points.

* The All Ordinaries closed lower by 62.1 points, or 0.81 per cent, to 7636.2 points.

* At 1713 AEDT, the SPI200 futures index was higher by eight points, or 0.11 per cent, to 7321 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 71.16 US cents, from 71.00 cents on Tuesday

* 80.92 Japanese yen, from 80.79 yen

* 63.13 Euro cents, from 63.04 cents

* 53.73 British pence, from 53.84 pence

* 105.57 NZ cents, from 105.46 cents.

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