Yahoo Finance ASX ends day up 0.35% despite Evergrande contagion fears
The Australian share market managed to end the day in the green despite a sharp drop at the open this morning, eking out 0.35 per cent growth at the close today.
The benchmark ASX200 ended the day at 7,273.8 points, adding 25.6 throughout the day despite 0.5 per cent being wiped from the index in the morning.
The best performer today was energy company AusNet Services, which saw its share price boom by 9.75 per cent today. On the other hand, APA Group was the biggest loser of the day, copping a 4.95 per cent drop after it launched a $10 billion takeover on AusNet.
Other big winners include Washington H. Soul Pattinson (4.29 pe rcent) and WiseTech Global (4.17 per cent), while Nickel Mines and Janus Henderson were the second- and third-biggest losers today (-4.52 per cent and -3.85 per cent respectively).
What happened at noon?
Australia's share market has staged something of a recovery leading up to lunchtime, with most of the losses recovered.
The benchmark ASX200 was down just -1.3 points or 0.018 per cent at 12:01pm today, coming to 7,246.9 points.
Driving the losses so far today are APA Group (-4.17 per cent), Nickel Mines, Janus Henderson, Zip Co and Clinuvel Pharmaceuticals.
Meanwhile, strong performances from the miners, specifically Champion Iron, whose share price rose nearly 5 per cent, and Whitehaven Coal (up 3.64 per cent) have helped to pare back the sharp dip.
What happened this morning?
Australia's share market has dropped again at the open this morning after yesterday's bloodbath result, with rapidly falling iron ore prices and fear that China's property giant Evergrande could collapse pushing shares further into the red.
The benchmark ASX200 opened at 7,248.20 at 10am this morning, wiping around 0.5 per cent from the index.
Monday's share market bloodbath
The latest market decline comes hot on the heels of yesterday's bloodbath share market result.
The benchmark S&P/ASX200 closed 2.1 per cent and 155.5 points lower on Monday afternoon, with every sector bar utilities taking a hit, wiping around $50 billion from the index and sending stocks into a sea of red.
The broader All Ordinaries index also finished 2.15 per cent lower, down 165 points.
Iron ore stocks were the worst hit with Fortescue and Rio Tinto down more than 3 per cent and BHP hemorrhaging 4.2 per cent.
The broader materials sector lost 3.7 per cent amid a steep fall in iron ore prices amid concerns over Chinese demand.
Evergrande concerns explained
The share market plummet comes amid China’s crackdown on the real estate sector and concerns that Chinese mega-developer Evergrande is teetering on the edge of collapse.
Evergrande is one of the country’s biggest iron ore consumers, but there are fears that the developer’s US$305 billion woes are approaching Lehman Brothers proportions.
And some worry about the potential risks to the Chinese financial system and global contagion should the company fold.
Shares in Evergrande dropped more than 15 per cent on Monday.
The Evegrande saga comes amid a Chinese government crackdown on various sectors.
China is attempting to reduce the environmental toll of its industrial sector by curtailing steelmaking.
Iron ore is Australia’s biggest export, and the key ingredient in creating steel.
According to Bloomberg Economics, every US$10 decline in the price of iron ore has a AU$3 billion - AU$3.5 billion impact on the Australian economy - a problem worsened with the two most populous states in lockdown for weeks to come.
UBS Global Wealth Management executive director of commodities and FX Wayne Gordon told Bloomberg Market’s China Open that the situation in China is a “perfect storm”.
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