ASX rebounds in afternoon to close flat

Derek Rose
(Australian Associated Press)

 

Australian shares have rebounded from a broad slump to close slightly higher for a second day in a row.

After dropping below 6,100-mark for the first time in over a month in early trade, the benchmark S&P/ASX200 bounced back in the afternoon, closing up 5.4 points, or 0.09 per cent, to 6,136 points on Wednesday.

The broader All Ordinaries closed up 4.5 points, or 0.07 per cent, at 6,217.6.

“It’s a bit of a choppy day, there’s a little bit of uncertainty in the market,” CommSec market analyst James Tao said.

Investors were worried about the “yield inversion” in the United States bond market, Mr Tao said, referring to the unusual situation that has developed in which bonds with longer maturities have lower yields than bonds with shorter ones.

Some have taken that as a sign of a recession is imminent, although other economists say it’s not quite that simple.

The Australian bond market has featured no such inversion but yields continued to plummet on Wednesday after the Reserve Bank of New Zealand switched to a dovish stance and said a rate cut was now more likely than a rate hike.

Australian three-, five- and 10-year bonds all set fresh all-time lows, and the Aussie dollar dropped 0.4 per cent as well.

On the ASX, tech stocks led gainers, up collectively 0.89 per cent, with Afterpay Touch up 1.89 per cent to $19.97, Wisetech Global up 1.38 per cent to $22.84 and Xero up 1.86 per cent to $48.73.

Utilities led decliners, down 1.34 per cent, with APA Group down 1.95 per cent to $10.08 and AGL Energy down 1.41 per cent to $21.61.

Lynas Corp and Wesfarmers both rose after the rare earth mineral miner rebuffed the Perth conglomerate’s $1.5 billion, $2.25-a-share unsolicited takeover offer.

Lynas shares closed up 1.9 per cent to $2.14, while Wesfarmers stock rose 0.71 per cent to $34.04.

There was no indication what Wesfarmers’ next move might be. A spokeswoman said the company would be responding “in due course”.

Cromwell Property Group was down 0.45 per cent to $1.105 after it confirmed it had made an offer to London-listed property trust RDI REIT, a London-listed property trust with a market capitalisation of $686 million.

Among the big four banks, Westpac was down marginally – 0.08 per cent, or two cents, to $25.95 – while ANZ, NAB and Commonwealth were up between 0.18 per cent and 0.48 per cent.

Pharma giant CSL dropped 0.98 per cent to $192.33, while mining giant BHP gained 0.93 per cent to $37.90.

Rio Tinto rose 1.52 per cent to $95.23, while Fortescue Metals gained 2.42 per cent to $6.78.

The Aussie dollar was buying 71.02 US cents, from 71.22 US cents on Tuesday.

Mr Tao said investors would be keeping an eye on the US-China trade talks on Thursday, which are set to resume in Beijing.

ON THE ASX:

* The benchmark S&P/ASX200 index was up 5.4 points, or 0.09 per cent, to 6,136 points at 1630 AEDT on Wednesday.

* The All Ordinaries was up 4.5 points, or 0.07 per cent, to 6,2137.6.

* At 1630 AEDT, the SPI200 futures index was down two points, or 0.03 per cent, to 6,113.

CURRENCY SNAPSHOT AT 1630 AEDT:

One Australian dollar buys:

* 71.02 US cents, from 71.22 US on Monday

* 78.55 Japanese yen, from 78.42

* 63.1 euro cents, from 62.98

* 53.89 British pence, from 54.02

* 104.47 NZ cents, from 103.16

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