Headline indices of the Australia stock market declined for second straight session on Wednesday, 11 July 2018, as risk aversion selloff triggered amid sign of escalating trade tensions between the world's two biggest economies after the United States said it would impose tariffs on an extra 200 billion worth of Chinese imports. Total 8 out of 10 ASX issues declined, with shares in materials, energy, utilities, telecom, financial, realty and industrials issues being notable losers. Around late afternoon, the benchmark S&P/ASX 200 Index fell 35.49 points or 0.57% to 6,222.60. The broader All Ordinaries Index was down 34.66 points or 0.55% to 6,308.10.
The United States government decided to impose the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement. The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10% tariffs on an extra $200 billion worth of Chinese imports.
S. officials released a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. It also includes consumer goods ranging from car tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
Last week, Washington imposed 25% tariffs on $34 billion of Chinese imports, drawing immediate retaliatory duties from Beijing on US imports in the first shots of a heated trade war. US President Donald Trump had warned then that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports.
shares of financials were the main contributor to losses for the local bourse with all four major lenders in the red around the 1% mark as funding pressures continue to rise.
Shares of materials and resources were also taken a hit with a mixed performance overnight. Crude oil lifted while base metals were mostly weaker on the London Metals Exchange (LME). Miners, BHP Billiton (BHP), Rio Tinto (RIO), and South32 (S32) fell in the range of 1% - 2%. Origin Energy (ORG) and AGL Energy (AGL) were sliding in the range of 4% - 6% with consumer watchdog, the ACCC recommending the federal government increase competition in the retail energy market to lower costs for consumers.
CURRENCY NEWS: The Australian dollar declined against greenback. The Aussie, considered a liquid proxy for China-related trades, fell 0.5% against the dollar to $0.7422.
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