ASX ends flat as GDP data prompts rethinking


Australia’s emergence from recession prompted investors to revise their projections and sell bonds and stocks, before the ASX ended, little change.

The benchmark S & P / ASX200 closed only 1.7 points, or 0.03%, higher at 6,590.2 on Wednesday.

The All Ordinaries closed 0.9 points, or 0.01%, at 6,811.3.

The main news of the day was that the Australian economy grew 3.3% in the September quarter as it recovered from the coronavirus pandemic.

The data prompted investors to take action.

IG Markets analyst Kyle Rodda said better-than-expected GDP numbers raised investors’ expectations for Australian bond yields.

This caused them to sell bonds, which increased yields. Australian 10-year bond yields climbed to almost 1%.

“Yields increased on expectations of higher returns going forward, which put pressure on stocks,” said Rodda.

The ASX200 index fell to a session low of 6561.5. Investors then pushed the index close to where it started the session.

There appeared to be no influence from US markets, which closed higher as investors bet on a COVID-19 vaccine available by Christmas.

Most ASX sectors ended lower, but lost less than one percent.

Materials were the best, up 1.16%.

Biotech Mesoblast was one of the best large companies out there.

It rose 7.26% to $ 4.43 after U.S. officials decided to speed up approval of its drug for critically ill COVID-19 patients.

Mesoblast has an ongoing phase three trial in the United States of remestemcel-L, which is administered intravenously.

The company and its partner Novartis could then request emergency use.

The fleet manager SG Fleet was also the best performer.

It closed up 5.99% at $ 2.30 after responding to a media report suggesting it may partner with another fleet manager, LeasePlan.

SG Fleet did not confirm the talks, but said all talks were preliminary.

Westpac has announced that it will sell its insurance business to Allianz for $ 725 million.

The bank will continue to offer home and content insurance by licensing Allianz products.

The shares closed 0.1% higher at $ 20.30.

ANZ gained 0.66% to $ 23.03, the Commonwealth lost 0.19% to $ 80.10 and the NAB lost 0.17% to $ 23.00.

In mining, BHP rose 1.95% to $ 39.31, Rio Tinto rose 1.98% to $ 104.99, while Fortescue lost 0.55% to $ 18.23.

Gaming group Crown Resorts has appointed a financial crimes and compliance officer, following an NSW investigation into his suitability to hold a Sydney casino license.

Steven Blackburn will step down from his current role as National Australia Bank Financial Crime Risk Officer and Group Money Laundering Reporting Manager at Crown on March 1.

The shares rose 0.62 percent to $ 9.81.

In the United States earlier, strong data on Chinese factories and increased efforts to provide financial stimulus have boosted investors.

A bipartisan group of U.S. lawmakers unveiled a $ 908 billion COVID-19 relief bill to help small businesses, the unemployed and more.

Economists on Thursday expect October’s trade balance to show a surplus of $ 5.8 billion, from $ 5.6 billion in September.

Exports are forecast to increase 3.5 percent during the month.

The Australian dollar was buying 73.74 US cents at 1725 AEDT, up from 73.66 US cents at Tuesday’s close.

ON ASX

* The benchmark S & P / ASX200 closed only 1.7 points, or 0.03%, higher at 6,590.2 on Wednesday.

* The All Ordinaries closed 0.9 points, or 0.01%, at 6,811.3.

* At 1725 AEDT, the SPI200 futures index was five points higher, or 0.08%, at 6599.

CURRENCY SNAPSHOT

An Australian dollar buys:

* 73.74 cents US, compared to 73.66 cents on Tuesday

* 77.01 Japanese yen, from 76.87 yen

* 61.06 euro cents, from 61.61 cents

* 54.95 British pence, from 55.12 pence

* 104.33 New Zealand cents, compared to 104.74 cents.

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