Early trade on Tuesday saw the ASX 200 continue the selling momentum that was a feature of the previous session. After starting the session flat, the market was steadily sold off over the course of the morning to be lower by 64 points at the worst levels of the morning. Thereafter the market found an equilibrium , although there was little enthusiasm shown on the part of buyers to take advantage of discounted prices.
Each ASX sector posted meaningful declines, with the exception of Property Trusts, which were flat as a group. Healthcare led the sector declines by sizeable margins; Cochlear (COH) shares fell 5%,CSL shares were 3.2% weaker, Primary Healthcare (PRY) was 4% lower at lunch. Information Technology names featured in the weakness. Wisetech Global (WTC) shares retreated by 4.8%, with a similar loss for cloud accounting provider Xero Limited (XRO). AfterPay Touch shares were 6.8% lower at lunch. Industrials were the next worst decliners; Seven Group Holdings (SVW) and Cimic (CIM) were each down 3% a short time ago.
Participation in the selloff was above average with almost a million trades were measure by the ASX valued at almost $2 billion. At lunch 337 stocks were higher, 617 were lower and 338 were unchanged.
Ramsay Health Care (RHC) shares were lower by 2.7% after announcing it had increased its bid for Capio. The private hospital operator’s French subsidiary increased the offer price for the European private hospital manager by 20% to $1.28 billion. Ramsay Generale de Sante anticipates approval from the competition regulator, although plans by Capio to sell its French operations would see the bid withdrawn.
Cimic Group (CIM) share dropped 3% on reports that the Hong Kong government has taken steps to ban several contractors from bidding on Government contracts, including CIM’s subsidiary Leighton Asia. The move comes in response to claims by the Hong Kong Development Bureau that a number of subway projects were completed at a substandard level. The revelations prompted a police investigation and authorities are reportedly prepared to demolish parts of the relevant projects if deemed to be a threat to public safety.
Economic news released today was limited to sentiment surveys at a household and business level. The weekly gauge of consumer sentiment – the ANZ-Roy Morgan Consumer Confidence Index, fell 0.7% to 117.3 points; notwithstanding the decline the measure remains well above the longer run average of 113 points. Elsewhere, both components of the NAB Business Survey for September rose. The measure of Confidence rose 1 point to +6 points, while the Conditions rose the same amount to +15 points. The impact on the local currency was at the margins, with the Aussie recovering some lost ground in early Asian trade to be at 70.80 US cents a short time ago.
Published by CommSec