Reuters logo
Australia shares slip as US budget deadlock sours mood, CSL recovers
October 8, 2013 / 1:16 AM / 4 years ago

Australia shares slip as US budget deadlock sours mood, CSL recovers

SYDNEY, Oct 8 (Reuters) - Australian shares slipped 0.2 percent to one-month lows on Tuesday morning as a lack of progress in resolving the U.S. budget standoff kept buyers at bay, while a rebound in CSL shares limited the broad market losses.

Equity markets have been under pressure since the U.S. federal government shutdown began last Tuesday, and that is expected to only increase as the Oct. 17 deadline to raise the federal borrowing limit gets closer.

“People are just waiting for a solution out of the U.S. Hopefully today we’ll see fund managers coming back from school holidays and look for opportunities to pick up some undervalued stock,” said Jonathan Fyfe, investment adviser from Wilson HTM Investment Group.

The S&P/ASX 200 index lost 13.4 points to a one-month low of 5,147.7 by 0044 GMT. The benchmark dropped nearly 1 percent on Monday, breaking the 5,200 support-line that held for nearly a month.

Analysts don’t expect the U.S. government would default on its debt, but lack of progress in resolving the standoff has continued to sap investor confidence.

The ‘Big Four’ banks were mostly lower. Westpac Banking Corp slipped 0.3 percent while National Australia Bank fell 0.5 percent. Top lender the Commonwealth Bank of Australia bucked the trend, rising 0.7 percent.

Defensives such as consumer retail staple Woolworths Ltd and Suncorp Group Ltd each lost 1 percent.

Elsewhere, biotechnology firm CSL Ltd climbed 2.3 percent to A$65.57 after a slump in the previous session as the company said it expects its fiscal 2014 net profit will fall by $39 million after settlement of an antitrust class action in the U.S.

Australia’s Warrnambool Cheese and Butter Factory Company Holdings Ltd soared 11.8 percent to an all-time high of A$7.22 after the company agreed to an all-cash takeover by Saputo Inc, Canada’s largest dairy producer, that values the company at A$392.7 million ($370.1 million).

While investors remain distracted by the political antics in Washington, traders say the focus will soon turn to the upcoming earnings season in the U.S.

“There is also U.S. reporting season kicking off. If the earnings numbers aren’t good, even if the debt ceiling stuff is resolved, the market could come back a bit,” said Peter Esho, chief market analyst at Invast Financial Services.

New Zealand’s benchmark NZX 50 index fell 0.3 percent to 4,741.5.

Reporting by Maggie Lu Yueyang and Thuy Ong; Editing by Shri Navaratnam

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below