ASX drop 1.6pc to two-month low; Santos slams Barossa ruling

The ASX 200 closed 1.6 per cent lower at a two-month low amid jitters about the fallout of the next US rate hike. Imugene, Sayona Mining and Champion Iron lead the losses. Still, Soul Patts and Viva Energy found strong support. 

The Australian sharemarket has been affected by jittery US investors ahead of the Federal Reserve’s expected interest rate hike on Thursday. Picture: Mick Tsikas

Welcome to the Trading Day blog for Wednesday, September 21. The Australian sharemarket dropped 1.6 per cent to a two-month low ahead of another interest rate hike in the US.

The S&P/ASX 200 index dropped 1.6 per cent lower to 6700.2 points as investors fretted over the fallout of another expected interest rate hike by the Federal Reserve.

Jim Chalmers says the Reserve Bank will not need a fresh injection of taxpayer money, after the central bank said its $281bn pandemic-era bond-buying program would drive a “substantial” financial loss in 2021-22 and cost the central bank as much as $58bn over the coming decade.

Wall Street closed lower with the S&P 500 index down 1.1 per cent to 3855 points while the Nasdaq index fell 0.9 per cent to 11,425 and the Dow Jones Industrial Average index was 1.0 per cent lower to 30,706 points.

Bond yields continue to reach new long-term highs, with US 10-year yields up to 3.56 per cent, while two-year yields are higher at 3.95 per cent.

Oil prices are lower with global benchmark Brent crude falling 1.5 per cent to $US90.62 per barrel and the US Nymex is down 1.5 per cent to $US84.45 per barrel.

Iron ore futures fell by 0.3 per cent to $US98.33 a tonne

The Aussie dollar was near US66.92c at the US market close.