Australian shares tumble to two-year low over US-China trade fears
The Australian share market has slumped to a two-year low, weighed down by the major banks as hopes for a trade resolution between the US and China continue to dissipate.
The benchmark S&P/ASX200 index was down 129 points, or 2.27%, at 5552.5 on Monday, while the broader All Ordinaries fell 2.26%.
The positive sentiment from the temporary truce struck at the G20 summit between the US president, Donald Trump, and his Chinese counterpart, Xi Jinping, has faded, the CommSec market analyst James Tao said.
This was compounded by weaker than expected November import and export trade data out of China as well as the escalation of hostilities between the two superpowers after the arrest of a senior executive of Chinese electronics giant Huawei.
“After the G20 it was looking like there was a road to some kind of truce, but as we’ve progressed it feels like there’s less certainty on what both countries have actually agreed to at the summit,” Tao said.
Internet and technology shares took the biggest hit during a broad selloff on Wall Street on Friday, with the benchmark S&P 500 index posting its biggest weekly percentage drop since March.
ASX tech stocks followed suit, with Afterpay Touch tumbling 5.7% to $11.97, while Wisetech Global, Altium and Xero lost between 4% and 4.8%.
But the financials were the heaviest drag with ANZ suffering the biggest loss of the big four lenders, down 4.2% to $24.64, Westpac and Commonwealth fell 3.4% and 3% respectively, and NAB slipped 2.5% to $23.39.
Macquarie’s shares fell 3% to $109.89 and Bank of Queensland was 3.2% lower as it scrapped the $65m sale of its St Andrew’s Insurance business to the beleaguered Freedom Insurance Group.
The health care sector fell 3.7%, dragged down by benchmark CSL, losing nearly 4% to $176.64, and Cochlear, losing nearly 5% to $165.73.
Consumer stocks were once more in the doldrums against a backdrop of worries over spending and the energy sector fell despite oil prices edging higher on an OPEC-led cut, dragged down by New Hope and Soul Pattinson losing 3.7% and 3.9% respectively.
Oil Search, Woodside and Santos all eked out a gain.
Materials lost ground as South32, Rio Tinto and BlueScope all lost ground, but BHP rose 0.4% to $31.29.
Gold miners were more consistent after prices surged to a five-month peak, with Northern Star up 2.7% to $8.42, and Regis Resources 5.2% higher.
The Aussie dollar recovered ground after it had threatened to hit a sixweek low against the US dollar, but was still just US72.17c at 4.30pm AEDT compared with 72.29c on Friday.