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Australian shares close 1.61 per cent down

Steven Deare
·4-min read

Australia's share market closed at its lowest level since the first week of October after investors felt the fallout of a plunge on US markets.

The S&P/ASX200 benchmark index ended down 97.4 points, or 1.61 per cent, to 5960.3 on Thursday.

The index dropped early and reached its session low of 5940.0 shortly before 1500 AEDT, its lowest level since the first week of this month.

The All Ordinaries finished down 93.8 points, or 1.5 per cent, to 6168.

The results followed a slide on Wall Street. Investors were wary of soaring coronavirus cases and the possibility of a tight US presidential election result next week.

ThinkMarkets analyst Carl Capolingua noted the ASX200 closed below 6000 points, which had been a level in which fund managers would buy stock.

However, investors should not fret.

"I don't think it's make or break," Mr Capolingua said of the decline.

Based on recent months, he expected buying and selling in a broader range of between 5800 and 6200.

"The market is telling us fund managers are selling at about 6200," he said.

"At 5800, that's where they're buying."

US futures were higher by about one per cent, which gave more credence to the idea of a rally on Friday.

Meanwhile, the recovery in the Australian dollar from the depths of the coronavirus pandemic has made computers and phones cheaper.

Australian Bureau of Statistics figures show import prices fell 3.5 per cent in the September quarter and included a 7.2 per cent decline in telecommunications equipment and 8.7 per cent drop in office machinery.

The bureau says the cheaper phones are due to delays in new models and discounting of older models.

Commonwealth Securities chief economist Craig James said cheaper computers reflected a firm Australian dollar compared with the lows in March.

On the ASX, energy was the sector hardest hit, down 2.93 per cent, while information technology lost 2.02 per cent.

ANZ Bank reported a 42 per cent drop in full-year cash profit after loan losses increased, triggered by the pandemic.

The lender declared a final dividend of 35 cents per share, down from last year's payout of 80 cents per share.

ANZ's move to declare a lower dividend followed a directive by regulators.

Shares were down 2.4 per cent to $18.70.

Westpac said it settled two class actions in the US.

One was about trading activity in the Australian bank bill swap reference rate market.

The other was about disclosure notices connected to the bank's financial crime obligations between 2015 and 2019.

There will be no added costs for the settlements.

Shares were lower by 1.97 per cent to $17.95.

The Commonwealth ended down 0.45 per cent to $68.14 and NAB dropped 1.48 per cent to $18.60.

Myer's chair Garry Hounsell retired from the role and blamed two shareholders for a lack of support.

Premier Investments chair Solomon Lew and Wilson Asset Management boss Geoff Wilson have criticised results.

Shares finished down 2.08 per cent to 23 cents.

Fortescue Metals posted a five per cent rise in first-quarter iron ore shipments. Demand in China remained robust.

Shares finished up 0.85 per cent to $16.62. BHP lost 2.19 per cent to $34.01, while Rio Tinto shed 1.07 per cent to $90.96.

Earlier in the US, rising infection rates and politicians' failure to reach a deal on fiscal stimulus before the election drove all three stock indexes to close more than 3.0 per cent lower.

The Aussie dollar was buying 70.71 US cents at 1724 AEDT, lower from 71.44 US cents at the close of trade on Wednesday.

ON THE ASX

* The S&P/ASX200 benchmark index ended down 97.4 points, or 1.61 per cent, to 5960.3 on Thursday.

* The All Ordinaries finished down 93.8 points, or 1.5 per cent, to 6168.

* At 1724 AEDT, the SPI200 futures index was higher by 11 points, or 0.19 per cent, to 5947.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 70.71 US cents, from 71.53 US cents on Wednesday

* 73.82 Japanese yen, from 74.56 yen

* 60.17 Euro cents, from 60.71 cents

* 54.31 British pence, from 54.82 pence

* 106.27 NZ cents, from 106.54 cents.