Aust stocks close weaker

Local market edges lower after US government shutdown becomes official.

The Australian stock market has closed slightly lower after the United States government failed to pass a budget and officially shut down, with investors also watching the Reserve Bank of Australia's decision to leave interest rates on hold.

At the 1615 AEST official market close, the benchmark S&P/ASX200 index fell 0.23% to 5,206.8 points, while the broader All Ordinaries index lost 0.22% to 5,206.3 points.

IG analyst Stan Shamu said as it became clearer the US government would not be able to reach a budget compromise by the midnight deadline (1400 AEST), markets started tapering off.

But he said Asian equities held up reasonably well despite negative news from the US, as Japanese investors were optimistic that Prime Minister Shinzo Abe would also introduce stimulus measures after announcing a sales tax hike this afternoon.

The Australian benchmark "has been relatively flat today as caution prevails," Mr Shamu said.

"Investors [were] unsure of what direction to take with a pending US government shutdown and looming RBA decision."

The Reserve Bank left the official cash rate steady at a record low of 2.5%.

Related Articles