Market at two-year low

THE Australian share market has plunged to a new two-year low, dragged down by energy stocks, while insurers have been pelted with millions of dollars in claims after Sydney’s hailstorm.

The benchmark S&P/ ASX200 index was down 38.2 points, or 0.69 per cent to 5467.6 yesterday.

The broader All Ordinaries lost 0.71 per cent after another bleak session on Wall Street after President Donald Trump refused to sign a bill to fund the government, setting up a lastminute showdown with Democrats in the senate to avoid a partial shutdown.

On the last major day of trading for the year, CMC Markets chief strategist Michael McCarthy said it was important to note the “market wobble” was related to growth outlook and not the Australian or global economies.

“We’re having a re-pricing of US shares, which is reasonable given they got into such lofty valuations but unfortunately that negative momentum is starting to become a market force in itself,” he said.

“It’s pretty clear the negative action is now starting to rattle investor nerves as well as any other headlines that might cause concern.”

The big four Australian lenders all lost ground, with NAB and ANZ suffering the heaviest losses, both down 1.1 per cent to $22.84 and $23.30 respectively, and Commonwealth Bank the least, down 0.6 per cent to $68.48.

But the real damage was felt by the insurers.

IAG shares fell 4.3 per cent to $6.65, with the company expecting the bill from Thursday evening’s storm in Sydney to hit $169 million, while fellow insurer Suncorp lost 3.9 per cent to $12.42.

Lower oil prices dragged the energy sector into the red, with Origin, Caltex and Beach Energy between 1.7 and 2.7 per cent weaker.

Materials was one of only two sectors to close in the black, lifted by BHP rising 2.3 per cent to $33.36, and Rio Tinto and South 32 were 0.7 and one per cent higher.

The gold miners glistened after a near $US19 per ounce rise in the yellow metal, supporting a 3.7 per cent lift from Northern Star.

Evolution, Newcrest, Saracen and St Barbara were all in the black. Healthcare was the other positive mover, buoyed by sector benchmark CSL rising 1.2 per cent to $177.73.

Healthscope shares jumped 5.8 per cent after announcing Canadian investment firm Brookfield Asset Management intends proceeding with its takeover offer.

The Australian dollar strengthened slightly against its US counterpart.