Market’s $ 25b hit
THE Australian stockmarket has stumbled to its worst session since November amid growing jitters over the prospects for US President Donald Trump’s ambitious reform agenda.
More than $ 25 billion was wiped from the value of the nation’s listed companies yesterday as the benchmark ASX 200 index slipped 1.6 per cent.
It came as the President’s controversial healthcare bill threatened to drive a wedge through his Republican colleagues ahead of tonight’s vote in the US House of Representatives.
Investors globally took the division as a sign of wider malaise Trump administration.
The Australian market was handed its weakest lead from Wall St since the meteoric rise of Mr Trump ( pictured) to the White House, with the Dow Jones Industrial Average sliding 1.1 per cent overnight on Tuesday to a one- month low.
Here, real estate and gold stocks were among the few unscathed as investors scrambled to trim their exposures to the market following a largely unblemished start to the year.
Financials and healthcare stocks were some of the worst hit, broadly sliding 2.1 per cent and 1.6 per cent respectively.
ANZ was the worst in the performer among the Big Four banks, shedding 2.6 per cent to $ 30.76.
Blood products manufacturer CSL, which makes two- fifths of its revenue in the US, fell 2 per cent to $ 122.58.
Bionic- ear maker Cochlear, which is also heavily exposed to US currency fluctuations, shed 1.6 per cent to $ 130.34.
Analysts highlighted the friction over the US healthcare overhaul, which some conservatives have dubbed “Obamacare lite’’ due to its perceived similarities to former president Barack Obama’s model.
They said this was symptomatic of the challenges facing Mr Trump to unite his party and deliver the centrepiece reforms of his agenda, among them deep corporate tax cuts and a $ US1 trillion infrastructure splurge.
Failure on the healthcare front could halt the progress of other bills until after the US summer, analysts said.
“Investor sentiment seems to be turning against Trumponomics,” AxiTrader chief market strategist Greg McKenna said.
“If markets are going to unwind ( that) positivity, the Aussie dollar’s rally is over.”
The local currency slipped to a one- week low of US76.64c late yesterday. But Phillip Capital senior client adviser Michael Heffernan said the fears were “overblown” and market eruptions were inevitable.