Australia Market falls from 14-month highs

The Australian share market finished session lower on Thursday, 06 May 2021, as profit booking triggered on concerns over strained relations with China after China's National Development and Reform Commission (NDRC) indefinitely suspended all activity under a China-Australia Strategic Economic Dialogue.

At closing bell, the benchmark S&P/ASX200 fell 34.12 points, or 0.48%, to 7,061.69. The broader All Ordinaries dropped 38.13 points, or 0.52%, to 7,306.04.

China has decided to suspend all its activities under the Strategic Economic Dialogue with Australia, a move that is likely to exacerbate the tense diplomatic relations between the two countries. This decision comes a few weeks after Australia scraped the controversial Belt and Road (BRI) agreement with China citing the deal as against its national interest. Last month, Australian Foreign Minister Marise Payne said that the BRI deal has been canceled under the Commonwealth's new foreign veto laws. The cancellation could also mean an end to further Sino-Australian cooperation in the fields of industrial production, biotechnology and agriculture. Meanwhile, China had said that Australia's decision to cancel agreements between Beijing's flagship Belt and Road Initiative and the state of Victoria was among several "negative moves" that had hurt bilateral relations.

Travel stocks slid following cases of locally acquired Covid-19 in NSW and the reintroduction of restrictions for Greater Sydney. Qantas fell 1.5% to A$4.74, Corporate Travel was 3.1% down at A$16.80, and Flight Centre dropped 5.3% to A$14.46.

Tech stocks also took a beating in the wake of the NASDAQ's overnight fall, with Nearmap and Appen both losing more than 20% of their value. Afterpay dropped 7% to close at A$99.50.

Lenders were mixed, with Commonwealth Bank and Westpac closing slightly higher but NAB fell 3% to A$26.56 and ANZ fell 0.9% to A$27.65. Macquarie Group fell 1.3% to A$159.

Shares of big iron ore miners were the standout gainers after gains for the bulk commodity. BHP finished 2.1% higher at A$49.80. Rio Tinto was up 1% at A$125.76

Shares in Nearmap plummeted more than 23 percent after the aerial mapping firm said it will vigorously defend itself against legal action by U.S. rival Eagleview.

CURRENCY NEWS: The Aussie dollar took a beating after China said it would end economic dialogue with Canberra.

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