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The Aussie market is having its worst session in seven weeks after sharp declines on Wall Street. Weak US manufacturing data, the lowest reading in ten years, saw
the Dow Jones close more than 300 points weaker. All major US indices lost over 1 per cent as the soft reading raised concerns on the health of the global economy. The ASX 200 is suffering similar losses, down 88 points or 1.3 per cent to 6654, and giving back all of yesterday’s gains following the RBA cutting the official cash rate by 25 basis points to fresh lows of 0.75 per cent.

Losses have been broad based with close to 90 per cent of the top 200 stocks in reverse and the majority of sectors deeply in negative territory. The main drags are coming from the heavyweights such as the financials, materials and healthcare.

The big four banks are all at least 1 per cent lower. National Bank (NAB) is the main laggard as it slides 2.7 per cent on a company announcement that it is expecting an additional $1.18 billion in after-tax charges, of which $832 million is due to customer remediation. This is estimated to hit NAB’s 2H19 cash earnings by more than $1.1 billion.

Elsewhere, investor pessimism weighed on most commodity prices, which were mostly weaker overnight. Global oil prices fell on fears of slowing demand. Local energy producers are falling up to 2.8 per cent with Beach Energy (BPT) the worst performer.

Major miners including BHP Group (BHP) and Rio Tinto (RIO) are down roughly 2 per cent despite the price of iron ore lifting. Defensives such as gold stocks are among the most improved with a flight to safety to the precious metal. One of the stand outs is Northern Star (NST) which is climbing 2.5 per cent.

Pharmaceutical company, Mayne Pharma (MYX) is the most improved among the top 200 index after signing a 20 year exclusive licence and supply agreement for an oral contraceptive in the US. MYX shares are climbing 20 per cent and hitting the best levels since May this year.

The Aussie dollar has steadied after yesterday’s sharp fall. It is recovering from its post rate cut decline and is buying 67.15 US cents with no major local data due today. So far, 1.4b units have changed hands, worth $2.2b with 354 stocks higher, 621 lower and 323 unchanged.

Published by CommSec