The Australian share market closed lower on Friday, 22 May 2020, on following a fall on Wall Street overnight as concerns grew over U. S.-China tensions after the US Senate passed a bill aiming to delist Chinese companies from American exchanges and as China imposition of a new law in Hong Kong. At closing bell, the benchmark S&P/ASX200 index declined 53.40 points, or 0.96%, to 5,497.03. The broader All Ordinaries dropped 52.04 points, or 0.92%, to 5,608.82.
The Australian market on the back foot on heightened U. S.-China tensions after the US Senate passed a bill aiming to delist Chinese companies from American exchanges and as China imposition of a new law in Hong Kong.
The Senate passed a bill aiming to delist Chinese companies from American exchanges. Lawmakers and the White House have repeatedly raised concerns about US-listed firms that may be under Chinese government control or receiving capital from state funds.
That measure was passed after President Donald Trump said in a tweet that the incompetence of China caused this mass Worldwide killing, referring to the coronavirus.
Also weighing on sentiment was Beijing's plan to discuss a national security law for Hong Kong at the session to crack down on what it sees as subversive activity in the territory. The move drew a warning from US President Donald Trump, who said the United States would react "very strongly" against it.
The United States warned China against imposing a new national security law on Hong Kong, saying any dilution of the city's autonomy could lead to a withdrawal of the favourable U. S. trading terms that have helped Hong Kong maintain its position as a global financial centre.
Souring relations between Beijing and Washington has also made investors nervous about the Phase 1 trade deal signed earlier this year.
Market participants closely watched the opening session of China's National People's Congress, postponed from early March due to the virus pandemic, to see whether any policy would be announced that could further strain ties between the world's two largest economies.
All sectors came under pressure today. Financial stocks declined, with the "big four" banks falling in the range of 0.6% and 1.2%. Woodside, Santo and Oil Search were all down between 2.2% and 4% as the price of Brent crude dropped five% to just above $US34 a barrel. In the heavyweight mining sector, BHP fell 0.6%, Rio Tinto dipped 2% and Fortescue Metals dropped 0.2%.
CURRENCY NEWS: The Australian dollar changed hands at $0.6522 after touching levels above $0.658 yesterday.
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