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ASX closes down 1.4pct, hits 7-week low

·4-min read

The local share market has fallen to a seven-week low as fears of aggressive interest rate hikes weigh on sentiment.

The benchmark S&P/ASX200 index on Wednesday finished down 97.2 points, or 1.42 per cent, to 6729.3, its lowest close since July 19 and fifth losing day in six sessions.

The broader All Ordinaries had dropped 96.6 points, or 1.37 per cent, to 6959.3.

Sydney-based market veteran Michael McCarthy said Tuesday's rate hike had been a "salient reminder" to traders of the effect that the draining of the global liquidity pool would have on asset prices.

"What we've got here is a most unusual bear market," Mr McCarthy told AAP.

"We're not going to get a panic, we're not going to get a massive selldown as we did during COVID.

"Instead what we've got is a market that is a deflating tyre. And what we saw here was the tyre deflating more."

The ASX recovered slightly after the midday release of gross domestic product figures showing the economy grew at a respectable 0.9 per cent rate in the second quarter, in line with expectations, but then lost steam.

Every sector except tech and healthcare lost ground, with energy the worst hit, down 2.9 per cent.

Woodside dropped 3.2 per cent to $33.97 and Santos fell 1.6 per cent to $7.781.

In the heavyweight mining sector, BHP declined 2.7 per cent to $36.27, Rio Tinto fell by 1.5 per cent to a 10-month low of $89.41 and Fortescue declined 2.7 per cent to a 10-month low of $16.

For a second day in a row technology was one of just two sectors in the green, rising 0.3 per cent on Wednesday in a somewhat surprising show of resilience for the volatile space.

"There's a lot of hope in the market" and traders are buying the dip, Mr McCarthy said. "Unfortunately a lot of investment theses have been infected with magical thinking."

The financial sector dropped two per cent, with all of the big banks in the red.

NAB and Macquarie both fell 3.1 per cent, to $29.31 and $172.72, respectively. Westpac slipped 2.1 per cent to $20.83, ANZ declined 1.4 per cent to $22.28 and CBA had subtracted 2.1 per cent to $94.10.

Bendigo & Adelaide Bank was down 2.1 per cent to a nearly two-year low of $8.40.

Also hitting multi-year lows were Dominos Pizza Enterprises, TPG, Evolution Mining and Red River Resources - the last after it said it would place its Hillgrove Gold Mine in northern NSW in care and maintenance mode. About 50 workers there will be made redundant as the company decides how to proceed with the operation.

Hastings Technology Metals fell 18.1 per cent to $4.44 after completing a $110 million capital raise at a deep discount to fund a rare earths project in WA's Yangibana region.

Biotechnology companies saw varied results after revealing developments on clinical trials.

PharmAust gained 7.9 per cent to 8.2c following the start of a canine cancer treatment study and Argenica rose 1.0 per cent to 48.5c after receiving approval to test a new stroke treatment on human volunteers.

Neuroscientific, on the other hand, plunged 61.9 per cent to an all-time low of 8.2 cents after their planned human trial of a drug designed to treat neurodegenerative disease was unexpectedly rejected by the Human Research Ethics Committee.

ResApp was flat at 20.5c as shareholders approved the Brisbane-based respiratory health company's $180 million acquisiton by Pfizer. ResApp makes smartphone apps to diagnose respiratory ailments.

Meanwhile the Australian dollar had hit a two-year low against the surging greenback.

The Aussie was buying 67.24 US cents, from 67.92 US cents at Tuesday's close.

ON THE ASX:

* The benchmark S&P/ASX200 index on Wednesday finished 97.2 points lower at 6729.3, a 1.4 per cent drop.

* The broader All Ordinaries dropped 96.6 points, or 1.37 per cent, to 6959.3.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.24 US cents, from 67.92 US cents at Tuesday's close

* 96.84 Japanese yen, from 95.84 yen

* 67.89 Euro cents, from 68.48 cents

* 58.50 British pence, from 58.53 pence

* 111.69 NZ cents, from 111.44 cents.