Australian shares suffer from dwindling trade optimism
Dec 4- Australian shares continued its negative performance on Wednesday as reemergence of previous concerns about global trade inflict Wall Street stocks and dragged mining and financial sectors down.
Market sentiment on Sino-US trade pact dimmed as US President Donald Trump suggested that the deal was far from getting signed as Commerce Secretary Wilbur Ross verified Trump’s scheme of imposing tariffs to Chinese goods would be effective on Dec. 15 as discussed.
The S&P/ASX 200 index sunk down with 1.4% loss to 6,620.20 at 2349 GMT. Such followed after 2.2% loss from the previous session recording its worst daily performance in two months.
Previous concerns about trade pact resurfaced as just this Monday, Trump decided to impose tariffs on Brazil and Argentina’s steel products. This move showed signs that trade wars between US and trading partners will continue to bring market anxiety.
“The market remains incredibly sensitive to trade developments. The lack of urgency to cut a deal was presented … as very real,” RBC Capital Markets analysts said.
Heavyweight financial stocks were pulled down by its peers’ inactivity as the ‘alpha four’ lenders shed losses ranging from 1.3% to 2%.
Miners BHP Group and Rio Tinto suffered with 2.8% and 3.4% respective losses despite hike in iron ore prices following Vale SA’s production outlook cut-off.
Healthcare, technology, and consumer stocks sectors lost 1.5% each.
Gold stocks deviated trend as it benefited from bullion prices with above 1% earnings on Tuesday.
St Barbara and Newcrest Mining inched up with 2% and 0.7% gains respectively.
Investors are waiting for third quarter gross domestic product data to see indications on how economy is reacting to interest rate reduction this year.
New Zealand’s benchmark s&P/NZX 50 edged down with 0.5% loss to 11,174.50, the worst recorded performance in more than a month.
Agribusiness company Scales Corp and dairy firm a2Milk Co Ltd shed 2% each.