ASX slips; Perpetual sinks on $500m tax shock

Australian shares are slipping lower as new stimulus hopes in China are offset by a wave of profit-taking in banks and technology stocks.

The S&P/ASX 200 is 26 points lower at 8397 points. That’s despite a 3.2 per cent rally for the mining sector after China’s Politburo said it would embrace a “moderately loose” strategy for monetary policy next year.

‘Upside surprise’

The Politburo also promised a “more proactive” fiscal policy at its monthly huddle, according to Xinhua, raising expectations for Beijing to widen the fiscal deficit from 3 per cent at the annual parliamentary session in March.

“Relative to the low market expectations prior to the meeting, we view the outcome as an upside surprise due to stronger easing rhetoric,” said Goldman Sachs’ Hui Shan in a note to clients, adding that she expected further easing signals from the upcoming Central Economic Work Conference this week.

Those gains, however, are counteracted by falls in banking and tech stocks, which are down 1.5 per cent and 2 per cent respectively. That’s after indexes on Wall Street fell as traders took profits amid news that China had opened a probe into Nvidia.

Later Tuesday, the Reserve Bank of Australia will hand down its last interest rate decision until February. The central bank is widely expected to leave the cash rate on hold at 4.35 per cent for a ninth consecutive meeting.

Stocks in focus

Perpetual could be hit with a tax bill of more than $500 million over the sale of assets to private equity giant KKR. The shares sank 7.3 per cent to $20.31.

IAG says it intends to defend itself against a class action brought to the Supreme Court of Victoria. The shares fell 0.9 per cent to $8.57.

Shares in Platinum Asset Management are down a further 1.7 per cent after the stock collapsed more than 14 per cent on Monday as a prospective takeover deal with Phil King’s Regal Partners fell apart.

Life360 is 4 per cent lower at $23.07. That’s after it dropped 8.3 per cent in Monday’s session on revelations the stock’s weighting in the Russell indexes was miscalculated, forcing passive funds to re-adjust their positions.