Australia Market tumbles after Trump announces more tariffs on China

Headline indices of the Australia share market closed down for third straight session on Friday, 02 August 2019, as risk sentiments undermined on tracking fall in Wall Street overnight amid an escalation in the trade dispute between the U.S. and China after President Donald Trump announced a plan to impose a 10% tariff on the remaining $300 billion worth of Chinese imports. At closing bell, the benchmark S&P/ASX200 index declined 20.35 points, or 0.3%, to 6,768.57, while the broader All Ordinaries dropped 25.88 points, or 0.38%, to 6,846.06.

Sydney market commenced trading with back footing as U.S. President Donald Trump new tariffs on China sent a shockwave through global markets after he announced the 10% tariffs on another $300 billion in Chinese goods starting 01 September 2019.

 

The materials and energy sectors ended the day as the main laggards. The energy sector fell 2.5% with losses of more than 2% for Santos (STO) and Woodside Petroleum (WPL). In the mining space, BHP Group (BHP) and Rio Tinto (RIO) both lost more than 3% while Fortescue Metals (FMG) slumped 6.1% to be the worst performer on the ASX 200.

Consumer stocks also declined despite a slightly better than expected reading for retail sales over the month of June. Sales growth is still subdued with Harvey Norman (HVN) down 2.2%, Myer (MYR) fell 4.6% and JB Hi-Fi (JBH) lost 3.5%. Defensives outperformed the market with gains for healthcare and property trusts. The biggest improvements came for gold miners, the price of the precious metal rallied on a flight to safety. Saracen Minerals (SAR) and Resolute Mining (RSG) both surged more than 10% each.

In company news, GrainCorp (GNC) and Bega Cheese (BGA) both declined after lowering earnings guidance ahead of the upcoming profit reporting season. GNC fell 5% and BGA was 4.3% lower. AGL Energy also confirmed it will delay and stagger the closure of its Liddell power station and Torrens A plant to ensure energy supply is maintained.

ECONOMIC NEWS: Australia Retail Sales Advance 0.4% On Month In June--Australia's retail sales advanced 0.4% month-on-month in June, following a 0.1% rise in May, data from the Australian Bureau of Statistics showed Friday. This was the fastest growth since February and better than the expected increase of 0.3%. Clothing sales climbed 2%, while department store sales fell 0.6%. Food services edged up only 0.1% and turnover of cafes, restaurant and takeaway food services gained 0.5%. In the second quarter, retail sales grew 0.2%, reversing a 0.1% fall in the first quarter.

CURRENCY NEWS: The Australian dollar declined against greenback on Friday. The Australian dollar changed hands at $0.6798 after dropping from levels above $0.684 in the previous session.

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