Aust shares edge lower as US debt ceiling talks stall

·4-min read
Steven Saphore/AAP PHOTOS

The local share market has finished slightly lower amid tense negotiations on raising the US debt ceiling and avoiding a potentially cataclysmic default.

The benchmark ASX200 index on Monday finished down 16.2 points, or 0.22 per cent, at 7,263.3. The broader All Ordinaries dropped 20.8 points, or 0.28 per cent, at 7,450.7.

In the US, House Speaker Kevin McCarthy and President Joe Biden were set to meet on Monday to resume negotiations on the US debt ceiling, which have become bogged down amid Republican demands to cut spending.

If the ceiling is not raised soon the world's most powerful nation will begin defaulting on its debts, perhaps as soon as June 1.

"The fact about the debt ceiling is that it is more of a political drama than anything else," wrote Naeem Aslam, chief investment officer with Zaye Capital Markets.

"Traders know that this is the time when politicians in America can flex their muscles, and everyone has their own agenda behind it.

"What it does is that it creates unnecessary volatility in the markets and shakes confidence among investors and traders in the US as being a safe haven place with respect to investments."

A phone call between Biden and McCarthy late on Sunday night reportedly went well.

Tyro Payments was the ASX300's biggest loser on Monday, plunging 16.6 per cent to a six-month low of $1.28 after the eftpos machine provider disclosed that Sydney-based private equity firm Potentia Capital Management had walked away from its near-$1 billion takeover offer after months of negotations and due diligence.

"We have appreciated Potentia's engagement and are disappointed that they were ultimately unable to deliver a revised offer," said Tyro chair Fiona Pak-Poy.

All of the Big Four banks were lower, with CBA and NAB both falling 0.9 per cent, to $98.90 and $26.57, respectively. ANZ and Westpac both dropped 0.8 per cent, to $23.79 and $21.06.

Insurers were mostly up, possibly on the prospect of higher interest rates which are positive for their investment portfolios. QBE gained 1.0 per cent to $14.74 and Suncorp added 1.1 per cent to $12.76.

The interest-rate-sensitive real estate sector was the biggest loser among the ASX's 11 official sectors, dropping 0.76 per cent.

The heavyweight mining sector fell 0.3 per cent, although BHP edged 0.1 per cent higher at $44.20 and Fortescue climbed 0.2 per cent to $20.56.

Rio Tinto fell 0.2 per cent to $109.24, and goldminers were lower as the price of the precious metal fell to $US1,975 an ounce and a wave of profit-taking hit the lithium producers.

Northern Star was down 0.9 per cent to $13.19 and Allkem dropped 3.9 per cent to $15.

The energy sector was the best performer, climbing 1.0 per cent, with Woodside growing 1.1 per cent to $34.63 and Santos adding 1.9 per cent to $7.38.

New Hope was up 0.8 per cent to $5.15 as the coalminer announced underlying April quarter earnings of $448.1 million, up 14.8 per cent from the previous quarter and 20.6 per cent from the same quarter last year.

In tech, Bigtincan Holdings was up 15 per cent to 75.5c as the AI-powered sales platform announced it had received several confidential takeover offers since engaging with Morgan Stanley to evaluate a potential sale.

The Australian dollar was buying 66.35 US cents, from 66.47 US cents at Friday's ASX close.


* The benchmark S&P/ASX200 index finished Monday down 16.2 points, or 0.22 per cent, at 7,263.3.

* The broader All Ordinaries dropped 20.8 points, or 0.28 per cent, to 7,450.7.


One Australian dollar buys:

* 66.35 US cents, from 66.47 US cents at Friday's ASX close

* 91.48 Japanese yen, from 91.78 Japanese yen

* 61.40 Euro cents, from 61.69 Euro cents

* 53.37 British pence, from 53.56 British pence

* 105.84 NZ cents, from 106.15 NZ cents