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ASX ends 2.2pc down after US debate

Steven Deare
·4-min read

Investors on the ASX ramped up their sell-off after the first debate for the US presidency, generally seen as a win for the Democrats' Joe Biden, and the market had its first monthly fall since the pandemic first gripped Australia.

The S&P/ASX200 benchmark index was lower before Donald Trump and Mr Biden's stoush, then slipped further down by 136.2 points, or 2.29 per cent, at 5815.9 points on Wednesday. All sectors were lower.

The index recorded its first monthly decline (4.04 per cent) since the 21.18 per cent crash in March as the coronavirus beset the country.

The ASX200 lost 1.39 per cent for the quarter.

The All Ordinaries index finished Wednesday down by 132.2 points, or 2.15 per cent, at 6009.3.

All eyes were on the debate in Cleveland, which began at about 1100 AEST. In an ill-mannered display, both candidates called each other names and interrupted.

Economic recovery from the coronavirus recession was a key issue.

Republican President Mr Trump defended his push to reopen the US economy despite the virus, then pointed to Mr Biden and said: "He'll close down the whole country ... and destroy our country. Our country is coming back incredibly well. We don't need somebody to come in and say let's shut it down."

Mr Biden said he wanted the economy to open safely.

"You can't fix the economy until you fix the COVID crisis, and (Mr Trump) has no intention of doing anything about making it better for you all at home in terms of your health and your safety," Mr Biden said.

The election is on November 3.

Tribeca Investment Partners portfolio manager Jun Bei Liu said the market definitely moved lower after the debate.

She said investors had a base case scenario of a Trump election win.

"Markets don't like uncertainty," she said. "A Trump win will mean the status quo, and more stimulus.

"Biden has been clear he'll put the corporate tax rate up straight away (if he wins). Markets don't like that."

While Mr Biden leads the polls, Ms Liu did not see a possible change in president as the reason for the first monthly decline in the ASX since March.

She said the ASX outperformed most markets in August (a 2.24 per cent gain) and believed the slump was due to investors booking profits.

In other news, China's manufacturing activity continued to expand in September, which helped the Aussie dollar.

The purchasing managers' index for the manufacturing sector was 51.5 in September, up from 51 in August, according to official data.

On the ASX, energy was the worst sector, down 2.4 per cent.

Materials and financials had losses of more than 2.0 per cent.

In banking, ANZ was down 2.05 per cent to $17.22, the Commonwealth dropped 2.17 per cent to $63.61, NAB edged lower by 1.83 per cent to $17.75 and Westpac dipped by 1.86 per cent to $16.84.

In mining, BHP declined by 3.5 per cent to $35.60, Rio Tinto lost 1.57 per cent to $94.32 and Fortescue rose by 0.87 per cent to $16.30.

Santos had its controversial Narrabri coal seam gas project approved by NSW authorities, which has bolstered chances of federal approval.

Shares were lower by 3.94 per cent to $4.88.

Corporate Travel Management was up 9.74 per cent to $17.23 after raising $262 million from institutional shareholders, which will help fund a $4 billion buy of North American provider Travel & Transport.

Shares sold for $13.85 each.

Corporate Travel Management will next raise $113 million from retail shareholders.

The Aussie dollar was buying 71.16 US cents at 1719 AEST, up from 70.81 US cents after the close of trade on Tuesday.

ON THE ASX

* The S&P/ASX200 benchmark index closed lower by 136.2 points, or 2.29 per cent, at 5815.9 points on Wednesday

* The All Ordinaries index finished down by 132.2 points, or 2.15 per cent, at 6009.3.

* At 1719 AEST, the SPI200 futures index was trading higher by 26 points, or 0.45 per cent, to 5828

CURRENCY SNAPSHOT

One Australian dollar buys:

* 71.16 US cents, from 70.76 US cents on Tuesday

* 75.17 Japanese yen, from 74.85 yen

* 60.63 Euro cents, from 60.69 cents

* 55.46 British pence, from 55.14 pence

* 108.11 NZ cents, from 108.01 cents.