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ASX dips, snapping six-day winning streak

·4-min read

The Australian share market has finished slightly lower, ending its six-day winning streak as a US politician's visit to Taiwan raised geopolitical tensions and jittered markets.

The benchmark S&P/ASX200 index finished Wednesday down 22.2 points to 6,974.9, a 0.32 per cent dip.

The broader All Ordinaries closed down 13.5 points, or 0.19 per cent, to 7202.9.

"Look, it's a day really without too much events," Jun Bei Liu, portfolio manager of the Tribeca's Alpha Plus Fund, said.

"The tension between China and Taiwan certainly did put a bit more pressure on the market, but only just marginally. We thought it'd be significantly weaker."

Other Asian markets were mostly higher but mainland China indexes turned negative on Wednesday as Beijing issued stern warnings to the United States regarding House Speaker Nancy Pelosi's visit to Taipei.

Nine of the ASX's 11 sectors lost ground, with consumer discretionary falling the most, by 1.2 per cent.

Mining lifted 0.4 per cent, buoyed by a $500 million mine expansion by Lynas Rare Earths, and tech gained 2.2 per cent as Xero lifted 3.6 per cent and Wisetech Global added 3.3 per cent.

Ms Liu said the strength of the tech sector was a little surprising, given how bond prices had fallen on the back of hawkish commentary from several Federal Reserve officials about the need for continued rate hikes to combat inflation.

"So we should definitely expect tonight there will be some weakness across the NASDAQ and tech companies," she said.

In mining, Lynas advanced 7.6 per cent to hit a two-month high of $9.55 after announcing a major expansion plan for its Mt Weld mine near Laverton, WA, amid robust demand for rare earth minerals from the wind power and electric vehicle industries.

BHP was basically flat at $38.61, Fortescue Metals gained 0.7 per cent to $18.02, and Rio Tinto dipped 0.5 per cent to $96.80.

Mining explosives company Orica was in a trading halt after announcing a capital raising to acquire Axis Mining Technology for $260 million.

The Perth-based company supplies navigation data and drilling solutions to mining companies around the world.

Orica competitor Incitec Pivot gained 1.9 per cent to $3.70.

A2 Milk was up another one per cent to $4.95 after Tuesday's 7.9 per cent gain on speculation the Kiwi company would soon gain permission to sell its infant milk formula products in the United States.

"It's partly because A2 is a heavily shorted stock," Ms Liu said. "A lot of hedge funds, they borrow to short sell this company, and with the prospect of getting a US temporary licence, it has really had those people closing out their positions."

All the big banks were down, with CBA falling 1.5 per cent to $100.47, Westpac dropping 1.1 per cent to $21.75, ANZ declining 0.4 per cent to $22.71 and NAB retreating 0.6 per cent to $30.78.

Pinnacle Investment Management climbed 12.2 per cent to a six-month high of $11.30 after the fund manager announced its full-year net profit after tax had risen 14 per cent to $76.4 million.

"The result is pretty much in line with expectations, but some of the key operating metric is doing better than expected," Ms Liu said. "Things like fund flow is actually quite strong, and the fund manager's performance has been pretty good in July."

The ASX's own shares were down 3.4 per cent to $87.45 after the exchange announced its long-delayed blockchain-based replacement for its ageing CHESS settlement system would be pushed back again, to at least late 2024.

The exchange said it was hiring Accenture to provide an independent review of the troubled project.

ResApp soared 50 per cent to 18c after Pfizer upped its offer for the tiny Brisbane-based health technology company to 20.8c a share, or $178.8 million.

The pharmaceutical giant had previously been offering 14.6c a share, or $127 million, for the maker of a smartphone app that aims to diagnose respiratory diseases.

The Australian dollar meanwhile was buying 69.32 US cents, from 69.20 US cents on Tuesday.

ON THE ASX:

* The benchmark S&P/ASX200 index on Wednesday closed down 22.2 points, or 0.32 per cent, at 6975.9.

* The All Ordinaries dropped 13.5 points, or 0.19 per cent, to 7202.9.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 69.32 US cents, from 69.20 US cents at Tuesday's close

* 92.44 Japanese yen, from 90.61 yen

* 68.14 Euro cents, from 67.78 cents

* 56.90 British pence, from 56.80 pence

* 110.71 NZ cents, from 110.28 cents.

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