ASX back to gains but banks under cloud
Australia's share market had a modest recovery from Monday's huge losses although the spectre of a teetering Chinese property giant weighed on the banks.
The iron ore miners closed higher despite the price of the steel-making commodity slipping below $US100 per tonne. Iron ore sold for more than $US200 per tonne earlier this year.
The big banks closed lower as investors wait to see whether troubled Chinese property giant Evergrande can repay massive debts this week.
A corporate collapse could have implications for banks and property groups around the world.
IG Markets analyst Kyle Rodda said the risk of Evergrande defaulting likely kept ASX financial shares lower.
Property shares were the next worst performing category.
The best performing categories were energy, information technology and consumer discretionaries.
The benchmark S&P/ASX200 index closed higher by 25.6 points, or 0.35 per cent, to 7273.8 on Tuesday.
The All Ordinaries closed up by 25.2 points, or 0.33 per cent, to 7563.1.
The market fared much better than the lead from the US. Investors there gave their first response to Evergrande's trouble and sold widely.
Investors may also be nervous ahead of the US Federal Reserve's policy meeting this week.
In Australia, the Reserve Bank warned recovery from the expected economic downturn in the September quarter could be slower than previously experienced.
The central bank said consumers and business may be cautious about spending after lengthy coronavirus lockdowns, according to minutes of the past meeting.
In company news, Victorian electricity operator AusNet has a second suitor.
Energy provider APA Group joined the bidding war and offered $2.60 per share.
This is more than Brookfield Asset Management's offer of $2.50 per share.
AusNet shares closed higher by 9.75 per cent to $2.59.
APA Group shares were down 4.73 per cent to $8.46.
Clothing group Kathmandu posted improved full-year profit although this was largely due to the addition of Rip Curl.
Net profit after tax was $NZ63.4 million for the 12 months to July 31.
Sales in the first six weeks of this financial year were down due to coronavirus lockdowns.
Shareholders will receive a fully franked final dividend of three NZ cents per share. No final dividend was paid last year.
Shares on the ASX were down 1.4 per cent to $1.41.
The iron ore miners had sizeable gains early which were pared by the close of trade.
Fortescue shares sold for as much as $15.17 but closed higher by 0.34 per cent to $14.75. BHP and Rio fared little better.
Among the banks, NAB was worst and shed 0.88 per cent to $27.10. ANZ was best and was little changed.
The competition watchdog has allowed health insurer NIB to form a buying group with Honeysuckle Health.
The buying group will negotiate contracts with hospitals, and the ACCC said it would increase competition in the market.
Major insurers may not join the group, which can operate for five years.
NIB shares were up 1.33 per cent to $6.85.
The Australian dollar was buying 72.69 US cents at 1716 AEST, higher than 72.33 US cents at Monday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed higher by 25.6 points, or 0.35 per cent, to 7273.8 on Tuesday.
* The All Ordinaries closed up by 25.2 points, or 0.33 per cent, to 7563.1.
* At 1716 AEST, the SPI200 futures index was up one point, or 0.01 per cent, at 7240 points.
One Australian dollar buys:
* 72.69 US cents, from 72.33 cents on Monday
* 79.69 Japanese yen, from 79.36 yen
* 61.97 Euro cents, from 61.76 cents
* 53.16 British pence, from 52.89 pence
* 103.43 NZ cents, from 103.10 cents.
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