China hits Aussie market
Energy and materials stocks drag ASX back down
THE Australian share market closed lower again yesterday, with energy and materials stocks dragging the ASX back toward last week’s six- month low.
The benchmark S& P/ ASX200 index ended down 61.8 points, or 1.05 per cent, at 5843.1 points, while the broader All Ordinaries was down 1.02 per cent.
Pepperstone head of research Chris Weston said it appeared Australia had been caught up in the broader volatility of China’s efforts to lift its equity market.
“It’s been a two- day affair: China has effectively brought their A- game, and has chucked the kitchen sink at getting the equity markets up,” Mr Weston said.
“They’ve caused a two- day rally and, as soon as the Chinese market opened, we’ve traded lower.”
The energy sector was comfortably the worst performing, dropping early and declining further throughout the day to close 3.2 per cent down.
The resources sector dropped away after early gains, with Rio Tinto and BHP clos- ing down 1.1 and 0.8 per cent respectively.
Coronado Global Resources, Australia’s biggest coal mining IPO since 2012, closed 10 per cent below its float price of $ 4.00 on its first day of trade.
The heavyweight financial sector also fell after a choppy overnight session on Wall Street, with ANZ leading the declines among the big four banks with a 1.9 per cent drop to $ 25.29.
Commonwealth Bank was the best performing of the major lenders, falling 1.1 per cent to $ 66.61 after announcing the sale of its 80 per cent stake in an Indonesian life insurance business for $ 426 million.
The healthcare sector is down about 17 per cent since the end of August following a fourth straight session of losses.
Private hospital operator Healthscope leapt nearly 20 per cent to $ 2.13 after becom- ing the target of a $ 4.11 billion takeover bid involving AustralianSuper for the second time in six months, but sector giant CSL slipped another 1.9 per cent to $ 3.58.
Healthscope said the consortium’s latest proposal was worth $ 2.36 per share and was “substantially the same” as the one it rejected in May. However, Healthscope yesterday said it would assess the proposal.
Meanwhile, the Australian dollar slipped to US70.65c from 71.09 on Monday, as the previous day’s optimism over Chinese policy stimulus faded.