Australia Stocks trade mixed

Headline equities of the Australian stock market were mixed on Wednesday, 27 March 2019, as investor risk sentiments were subdued on following a weak lead from Wall Street overnight after a steep drop in U.S. bond yields led to worries about a potential recession. Continued uncertainty over Brexit also weighed on investor sentiment. Around late afternoon, the benchmark S&P/ASX200 index rose 17.13 points, or 0.28%, at 6,153 points, while the broader All Ordinaries added 15 points, or 0.24%, at 6,232.60.

Wall Street stocks declined on Wednesday (Mar 27) after a steep drop in U.S. bond yields led to worries about a potential recession. The yield on the 10-year US Treasury note on Wednesday fell to its lowest level since December 2017. The Dow Jones Industrial Average dipped 32.14 points (0.13%) to finish at 25,625.59. The broad-based S&P 500 shed 13.09 points (0.46%) ending at 2,805.37, while the tech-rich Nasdaq Composite Index fell 48.14 points (0.63%) to 7,643.38.

The precipitous decline in developed-market sovereign bond yields continued to unnerve investors about the economic outlook. Yields on 10-year Treasuries hit a fresh 15-month low on Thursday in Asia and rates on benchmark German Bunds sank further below zero after European Central Bank President Mario Draghi said an accommodative stance is still needed. Traders are snapping up bonds amid a return to low long-term rates around the world as investors fret that the slowing global expansion is deteriorating further despite signs of support from central banks. Recent data showed weakness from U.S. housing to retail sales and consumer sentiment, prompting a more dovish tone from the Federal Reserve. A closely watched segment of the yield curve inverted last week -- a gauge that's served as a recession warning. Fed funds futures are now pricing in more than a quarter point of easing by the end of 2019.

U.S.-China trade talks resume, with a cabinet-level American delegation due in China. Fed official Randal Quarles will speak Friday to the Shadow Open Market Committee on Strategic Approaches to the Fed's Balance Sheet and Communications.

Shares of banks and financials were in the red, with big four banks - ANZ Banking, Commonwealth Bank, National Australia Bank and Westpac - lower in a range of 0.4% to 0.8%.

Energy stocks also declined crude oil prices declined almost 1% overnight, with Oil Search lower by almost 1% and Santos down 0.1%, while Woodside Petroleum edged up 0.1% after.

Shares of materials and resources were mixed, with BHP Group up 0.2% and Rio Tinto up 0.7%, while Fortescue Metals fell 1%.

CURRENCY: The Australian dollar was down against the U.S. dollar on Thursday, as demand for commodity linked units dimmed amid concerns about the global economic outlook. The Australian dollar was quoted at $0.7085, down from $0.7102 on Wednesday.

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