The S&P/ASX 200 (ASX: XJO) recovered during the session on Wednesday, finishing 1.1% lower after falling as much as 1.5%.
The weakness came from a negative global lead with long-term bond yields spurring investors to act on comparatively high equity market valuations.
In Australia, the 10-year bond yield has jumped from close to 1.0% in August to 1.5% today.
Tech was hardest hit both overseas and domestically, with the most highly valued sector falling 2.4%, dragged lower by Afterpay Ltd (ASX: APT) and Nearmap Ltd (ASX: NEA) which were down over 4% and 5%, respectively.
Smartgroup under offer
Four in five stocks finished lower with Smartgroup Corporation Ltd (ASX: SIQ) a rare gainer, jumping 18% after receiving a takeover bid.
The bid came from a consortium including private equity group TPG Global, Potentia and Aware Super, which values the company at $10.35 per share. Smartgroup undertakes salary packaging and leasing for corporates so the offer seems opportunistically timed, representing a 38% premium to the closing price.
APA offer extended, gold outperforms
Shares in APA Group (ASX: APA) and AusNet Services Ltd (ASX: AST) outperformed the market after APA’s offer for the latter was extended as their due diligence period came to a close.
The mining sector continues to take the brunt of the sell-off, particularly the less diversified, faster-growing names with BlueScope Steel Limited (ASX: BSL) and Mineral Resources Limited (ASX: MIN) both falling around 5%.
ASX gold miners were the rare outperformers, with Newcrest Mining Ltd (ASX: NCM) gaining 1.9% as investors turned back to the precious metal and the AUD fell.
Orica downgrades
Explosives distributor Orica Ltd (ASX: ORI) added 3% despite announcing a further $345 million hit to net profit for the year ending 30 September.
Management confirmed a write-down on the value of previous acquisitions which had offset the gains on non-core land sales.
Home loan limits to cap property
Whilst higher interest rates tend to be positive for the banking sector, allowing them to generate more profit on their variable loans, news that APRA is considering regulating the amount of leverage borrowers can accept could put a halt on the property boom.
There are suggestions that the government is growing concerned about the surging debt to income ratios of Australian lenders, which are high even on a global scale.
ASX 200 today
The ASX 200 is expected to open higher this morning after the Dow Jones and S&P 500 staged a minor rebound overnight. The Nasdaq continues to struggle, closing 0.2% lower. To find out more, check out my US stock market report.