Australian shares flat as US debt talks reach stalemate

·3-min read
Joel Carrett/AAP PHOTOS

The local bourse has had another quiet day, finishing basically flat as traders await a resolution to the debt ceiling brinkmanship in the United States.

The benchmark S&P/ASX200 index on Tuesday finished down 3.4 points, or 0.05 per cent, at 7,259.9.

The broader All Ordinaries dropped 3.3 points, or 0.04 per cent, at 7,447.4.

In Washington, a meeting between US President Joe Biden and House Speaker Kevin McCarthy ended without a deal to raise the country's borrowing limit.

There are an estimated 10 days left before the world's most powerful nation runs out of authority to pay its bills.

Naeem Aslam, chief investment officer for London-based Zaye Capital Markets, said traders were becoming agitated with the spectacle, which could further damage the standing of the US as a safe haven.

"At this point, all that we are receiving from politicians is simply their politics, in which they continue to toy with the future of the United States of America with the verbiage that they use," he wrote.

The financial sector was the ASX's biggest gainer on Tuesday, climbing 0.8 per cent with all of the Big Four banks finishing in the green.

CBA rose 0.6 per cent to $99.44, ANZ added 0.8 per cent to $23.97, NAB climbed 0.4 per cent to $26.67 and Westpac finished up 1.0 per cent to $21.26.

Also, Macquarie gained 2.1 per cent to $180.27.

All of the Big Four banks were higher, by 0.3 to 0.6 per cent. Macquarie had risen by 1.5 per cent.

The heavyweight mining sector fell 0.7 per cent, with BHP drooping 0.9 per cent to $43.80 and Fortescue retreating 0.5 per cent to $20.45. But Rio Tinto edged 0.1 per cent higher at $109.38.

Aside from nano-caps, BrainChip was the biggest loser on the ASX, falling 17.7 per cent to a one-week low of 42c as the AI chip company held its annual general meeting in Sydney.

At that meeting, chairman Antonio Viana acknowledged to shareholders that the company had yet to produce a product that could see its way into end production systems.

"The reality is that the market is still in the discovery and embryonic stage with respect to edge-based AI," he said.

Elsewhere in the tech sector, Technology One had added 2.8 per cent to an all-time closing high of $15.75 and Xero had climbed 0.9 per cent to 15-month high of $110.43.

Zip gained 12.7 per cent to a three-month high of 62c following a positive report by Shaw and Partners.

Analyst Jonathon Higgins wrote that the buy now, pay later company was becoming the market leader in the space and stood to benefit from recently announced credit legislation in Australia.

The Australian dollar was buying 66.53 US cents, from 66.35 US cents at Monday's ASX close.

Looking forward, traders will be watching Tuesday night, Australia time, for the release of unofficial monthly manufacturing data known as the Purchasing Managers Index (PMI) for the Eurozone, the UK and US.


* The benchmark S&P/ASX200 index finished Tuesday down 3.4 points, or 0.05 per cent, at 7,259.9.

* The broader All Ordinaries dropped 3.3 points, or 0.04 per cent, to 7,447.4.


One Australian dollar buys:

* 66.48 US cents, from 66.35 US cents at Monday's ASX close

* 92.05 Japanese yen, from 91.48 Japanese yen

* 61.50 Euro cents, from 61.40 Euro cents

* 53.48 British pence, from 53.37 British pence

* 105.95 NZ cents, from 105.84 NZ cents