ASX 200 plummets at opening as Evergrande raises global concerns

Highlights

  • As of 10:30 AM AEST, the ASX 200 extended its losses, trading 0.41% or 30 points lower at 7,218.2.
  • The market breadth is on the weaker side with 10 out of the 11 sectors trading in red.
  • Iron ore prices have tumbled below US$100 per tonne for the first time in 14 months, falling 8.8% on Monday to US$92.98 per tonne.

Australian shares Tuesday opened on a negative note as global markets witnessed a sharp sell-off on Monday over debt-laden Evergrande’s probability of defaulting on its debt obligations, which may impact the pace of global economic growth. The ASX 200 tumbled 0.31% or 22.5 points to 7,225.7 during the opening session.

Investors feeling the heat of market fall

 Image Source: Copyright © 2021 Kalkine Media

Wall street ended sharply lower on Monday, while a preference for safe-haven assets firmed the US dollar. The Dow Jones took a hit of 1.79%, falling to 33,964.66, while the S&P 500 was down 1.70% at 4,357.71 by the closing. The NASDAQ Composite dropped 2.17% to 14,718.02 on Monday.

Related article: US markets close in red, dragged down by energy, financial stocks

How has the market performed so far?

As of 10:30 AM AEST, the ASX 200 extended its losses, trading 0.41% or 30 points lower at 7,218.2. The ASX All Ordinaries index fell 0.43% or 32.4 points to 7,505.5. Today’s fall has also increased the volatility levels, with A-VIX shooting 5.2% to 13.69.

Top laggards contributing the most to the ASX 200’s fall were AMP Limited (ASX:AMP) and Codan Limited (ASX:CDA), both falling 3.71% and 2.82$, respectively. On the other hand, stocks trying to keep the index from falling were Ampol Limited (ASX:ALD) and Endeavour Group Limited (ASX:EDC), both rising 0.98% and 0.91%, respectively.

The market breadth is on the weaker side with 10 out of the 11 sectors trading in red. The Metals and Mining sector and the IT sector are leading the fall with a 0.38% and 0.35% downtick, respectively. The only sector trading in green is the Industrials sector, gaining a mere 0.06%.   

Newsmakers

APA Group (ASX:APA), which owns natural gas and electricity assets, has offered to acquire AusNet Services for AU$9.9 billion, translating to AU$2.6 per share. Initially the company offered AU$2.32 per share for the acquisition.

ASX stocks in news

Image Source: Copyright © 2021 Kalkine Media

Australian supermarket giant, Woolworths Limited (ASX:WOW), is looking to sell its Australian dollar bond with six- and 10-year maturities. These bonds are linked to the company’s sustainability program. The company will hold a meeting Wednesday with potential buyers.

Atlas Arteria Group (ASX:ALX), developer of private toll roads, has declared an unfranked dividend of AU$0.155 per share, in line with the guidance provided in 1HFY21 result announcement. The ex-dividend date is 24 September 2021.

Iron ore prices have tumbled below US$100 per tonne for the first time in 14 months. Iron ore fell 8.8% on Monday to US$92.98 per tonne over concerns of a looming crisis on the Chinese property market. Iron ore miners such as BHP Group (ASX:BHP), and Fortescue Metals Group Limited (ASX:FMG) are expected to take a hit in today’s session.

Read more: Five ASX stocks under 50 cents which are in bull run

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