Aust stocks close lower

Local market finishes weaker as IMF head, US president warn on budget crisis.

The Australian stock market closed half a per cent lower as investors heard figures including the United States president and IMF head warn the US budget impasse could have dire consequences.

At the 1615 AEST official market close, the benchmark S&P/ASX200 index fell 0.51% to 5,208 points, while the broader All Ordinaries index declined 0.5% to 5,205.9 points.

IG analyst Chris Weston said the apocalyptic rhetoric on the crisis is heating up.

International Monetary Fund chief Christine Lagarde warned a failure to raise the debt ceiling could "very seriously damage" the global economy, President Obama called the government shutdown a "farce" and a US Treasury report said a failure to raise the debt ceiling could lead to a default with a "catastrophic effect" on financial markets and economic growth.

"When you see comments like these it’s tough for anyone to buy, even if you can look through noise," Mr Weston said.

"It’s also become quite apparent that there is a clear feed-back loop now between US monetary policy and the fiscal showdowns."

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