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Royal commission shock shakes ASX

Christian Edwards
AAP
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The benchmark S&P/ASX200 is back below 6,000 as the share market opens sharply lower

The benchmark S&P/ASX200 is back below 6,000 as the share market opens sharply lower

The Australian share market has closed lower following the shock announcement of a royal commission into the finance industry, with banks and insurers hit by the news - Commonwealth Bank and ANZ recording the biggest falls.

The benchmark S&P/ASX200 stock index was down 0.69 per cent at 5,969.9 points at 1630 AEDT on Thursday with the finance companies, dragged lower following the announcement of a banking royal commission.

After early losses, the big banks did improve in late trade but ANZ was 1.1 per cent lower, at $28.46 while the Commonwealth Bank dropped $1.55, or 1.9 per cent, to $79.43.

Westpac and NAB recovered from their declines, Westpac closing one cent lower at $31.47 and NAB one cent higher at $29.59.

Macquarie Private Wealth division director Martin Lakos the royal commission and a slump in miners meant the market could not reach the 6,000 point mark.

"The market has been trying for a comfort level around 6,000 when obviously the royal commission broke and while there's been a bit of a rebound, the real underperforming sector has actually been materials," Mr Lakos said.

A Chinese Purchasing Managers Index reading that beat expectations could not halt the slide for the big miners, Rio Tinto, down 1.1 per cent to $70.95 and BHP Billiton down 1.2 per cent to $27.30 as mining stocks were hit by lower metals prices.

While the price of oil has risen 35 per cent since June, anxiety around an OPEC meeting tonight that could decide global production levels has oil companies lower, with Santos and Origin Energy down 1.4 per cent and 1.2 per cent, while Woodside Petroleum and Oil Search shed 0.5 and 0.7 per cent, respectively.

However, Sydney-based AWE reached the close 23 per cent higher, at 67 cents, following a $430 million takeover bid from a Chinese energy group.

Elsewhere, Oroton shares, last trading at 43.5 cents, remain in a trading halt after the luxury retailer slid into voluntary administration.

Aristocrat's Leisure's share price spiked to a record $24.32 after the gaming maker released strong results and annonced a $1.4 billion online gaming acquisition but the stock ended down 6.8 per cent, at $21.99.

Meanwhile, fears of Chinese curbs on Australian iron ore, through to falling government bond yields continue to weigh on the Australian dollar, which has still recovered from overnight losses against the greenback.

The local currency was trading at 75.90 US cents at 1630 AEDT on Thursday, from 75.88 on Wednesday.

ON THE ASX AT 1630 AEDT:

* The benchmark S&P/ASX200 stock index was down 41.2 points, or 0.69 per cent, at 5,969.9 points

* The broader All Ordinaries index was down 38.9 points, or 0.64 per cent, at 6,057.2 points.

* The SPI200 futures contract was down 34 points, or 0.56 per cent, at 5,985 points

* National turnover was 4.6 billion securities traded worth $9.9 billion