(Australian Associated Press)
The Australian share market and the Aussie dollar have both come under pressure after the US ramped up its trade war with China.
The benchmark S&P/ASX200 index was down 42.5 points, or 0.68 per cent, at 6,215.6 points, extending Tuesday’s 0.44 per cent drop, while the broader All Ordinaries fell 42.6 points, or 0.67 per cent, at 6,300.2 points.
The US announced plans to impose a further $US200 billion worth of tariffs on Chinese products after the close of trade on Wall Street on Tuesday, with investors anxiously awaiting China’s response.
The latest move comes just days after the two nations imposed tariffs of $US34 billion on each other’s goods.
CMC Markets chief market strategist Michael McCarthy says the latest tariff announcement by the Trump administration has “really scared investors.”
“We’re seeing anti-growth movement across the markets, all of the Asia-Pacific exchanges are under pressure, every single one of them in the red,” Mr McCarthy said.
Fears about the global economic outlook due to the escalating trade war triggered big falls across the energy, materials, industrials and financial sectors.
Rio Tinto dropped 1.8 per cent to $80.16, BHP Billiton fell 1.3 per cent to $33.78 and Wesfarmers lost one per cent to $48.88.
The nation’s big four banks all finished in the red, with Commonwealth Bank falling 0.5 per cent to $74.05 and National Australia Bank losing 0.7 per cent to $27.65, ANZ slipping 0.8 per cent to $28.57 and Westpac falling 0.7 per cent to $29.29.
Bucking the broader market were some consumer-exposed stocks, including supermarket giant Woolworths and travel operator Flight Centre.
Woolworth rose 1.4 per cent to $31.28 and Flight Centre gained 3.8 per cent to $64.61.
The Australian dollar lost ground due to concerns about the global economic growth and lower commodity prices.
“Iron ore is an important export, copper is an important export, oil and gas are important exports so with all of those prices down there’s less demand for Australian dollars,” Mr McCarthy said.
The Aussie was trading at 74.10 US cents at 1700 AEST on Wednesday, down from 74.64 US cents on Tuesday.
ON THE ASX
* The benchmark S&P/ASX 200 index was down 42.5 points, or 0.68 per cent, at 6,215.6 points
* The broader All Ordinaries index was down 42.6 points, or 0.67 per cent, at 6,300.2 points
* The SPI200 futures contract was down 38 points, or 0.61 per cent, at 6,173 points at 1630 AEST
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.10 US cents, from 74.64 US cents on Tuesday
* 82.24 Japanese yen, from 82.894 yen
* 63.16 euro cents, from 63.54 euro cents
* 55.85 British pence, from 56.32 pence
* 108.74 NZ cents, from 109.08 cents
The spot price of gold in Sydney at 1700 AEST was $US1,251.92 per fine ounce, down from $US1,256.98 per fine ounce on Tuesday.