Australia Market extends losses on political uncertainty

Headline indices of the Australia market closed lower on Tuesday, 23 October 2018, as risk aversion selloff continued amid combination of domestic and international political uncertainty. Almost all ASX sectors lost ground, with shares of energy, materials, financials, and telecommunication services issues being notable losers. At closing bell, the benchmark S&P/ASX200 index fell 61.85 points, or 1.05%, at 5,843.09 points, while the broader All Ordinaries index shed 61.31 points, or 1.02%, to 5,944.85 points.

Political uncertainty at home resurfaced after Australia's Liberal National government suffered a disastrous by-election loss over the weekend, snatching away its one-seat majority. The country's Prime Minister, Scott Morrison, who ascended to the role after ousting Malcolm Turnbull in August, will meet independent lawmakers in a bid to shore up support for his government. If the prime minister fails to secure support from independent lawmakers to continue to govern, it potentially sets the stage for early elections, which were otherwise not due until May 2019.

Concerns over Italy's budget, deadlock on Brexit negotiations as well as tensions between the West and Saudi Arabia over the killing of journalist Jamal Khashoggi in Turkey have dented global risk appetite over recent days.

Shares of energy issue suffered heavy losses, as sentiment remained nervous in the run-up to U.S. sanctions against Iran's crude exports that start next month. Woodside Petroleum fell more than 2 percent and Santos was lower by more than 1 percent. Shares of Oil Search tumbled more than 3 percent despite the company reporting that its revenue for the September quarter nearly doubled from the preceding quarter on higher oil prices and an uptick in production that helped offset the impact of an earthquake in Papua New Guinea earlier this year.

Shares of materials and resources companies were also mostly lower despite copper and nickel finishing last week higher. BHP fell almost 1% and Rio Tinto shed 0.5%, while Fortescue Metals declined almost 2%.

Shares of Australian banks and financials saw losses, amid revelations of widespread misconduct in the industry in a high-profile public inquiry. ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank were down in a range of 0.5 percent to 2 percent.

Shares of hospital operator Healthscope jumped 19.9 percent after the company said it had received a takeover proposal from a consortium for A$4.11 billion.

CURRENCY: Australian Dollar was down against greenback and other major currencies on Tuesday. The Australian dollar was quoted at $0.7078, down from $0.7109 on Monday.

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