$25b wipe-out as Aussie stocks dive
INVESTOR jitters over the prospects of US president Donald Trump’s ambitious reform agenda have seen the Australian share market stumble to its worst session since November’s US election.
As the president’s controversial healthcare bill threatened to drive a wedge through his Republican colleagues ahead of tonight’s vote in the House of Representatives, global investors took the division as indicative of a wider malaise in Trump administration.
Australian markets were yesterday handed their weakest lead from Wall Street since Mr Trump’s meteoric rise to the White House, with the Dow Jones Industrial Average sliding 1.1 per cent to a one-month low.
At home, the benchmark ASX 200 index tumbled 1.6 per cent to 5684.5 points, with more than $25 billion wiped from the value of the nation’s top listed companies.
Only real estate and gold the stocks were left unscathed as investors scrambled to trim their exposure after a largely unblemished start to the year.
Financials and healthcare stocks were among the worst hit, sliding 2.1 per cent and 1.6 per cent, respectively.
ANZ was the worst performer among the big four banks, shedding 2.6 per cent to $30.76.
Blood products manufacturer CSL, which derives twofifths of its revenue from 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.
They said this was symptomatic of the challenges facing Mr Trump to unite his party and deliver his agenda’s centrepiece reforms, 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 US76.64¢ late yesterday.
But Phillip Capital senior client adviser Michael Heffernan said the latest fears were “overblown” and market eruptions were inevitable even during benign periods.