Australia Stocks slip amid trade deal uncertainty

The Australian share market closed down on Tuesday, 12 November 2019, as worries about U.S.-China trade friction and an escalation of violence in Hong Kong hurt sentiment. At closing bell, the benchmark S&P/ASX200 index declined 19.52 points, or 0.29%, to 6,753, while the broader All Ordinaries dropped 20.02 points, or 0.29%, to 6,857.

Investors were watching for developments on U.S.-China trade, amid uncertainty over what has been agreed between the two economic powerhouses. The U.S. President Donald Trump said over the weekend that reports about U.S. willingness to lift tariffs were "incorrect," only two days after a Chinese official said both sides agreed to rollbacks if talks progress. The U.S. President Donald Trump comments worsened sentiment already hit by a similar statement from White House trade adviser Peter Navarro that the tariff rollback plan faced fierce internal opposition at the White House. That ended days of optimism as officials said tariffs would be rolled back and the deal would be signed soon.

Both sides are working to sign what the White House has described as a phase one trade deal. Officials from both countries said on Thursday that China and the United States had agreed to roll back tariffs already in place on each others' goods in a "phase one" trade deal to end a damaging trade war, but the idea has been met with stiff opposition within some quarters of the Trump administration.

The next hints on progress in negotiations with China may come later on Tuesday, when Trump is scheduled to deliver a speech on trade and economic policy at the Economic Club of New York.

Meanwhile, market movements in Hong Kong continue to be monitored, following an escalation in violence amid unrest in the embattled city. A protester was left in critical condition after being shot by police Monday morning local time. Separately, another man was also in critical condition after he was doused with what police described as flammable liquid and set on fire.

Financial stocks mixed, with Westpac Banking Corp down by 3.6% as the stock trades ex-dividend. Commonwealth Bank of Australia shares rose as much as 1.1% after the country's biggest lender reported a near 10% drop in first-quarter cash profit and said margin pressure from record-low interest rates would persist.

Materials stocks dropped amid uncertainties surrounding the Sino-US trade talks. Fortescue Metals Group shed 2.8% after cooling demand dragged iron ore prices to a more than two-month low.

CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, was down against greenback. The Australian dollar changed hands at $0.6856, declining from around $0.6900 from the previous week.

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