Headline indices of the Australian share market declined for second consecutive session on Wednesday, 5 December 2018, on broadbased selloff after a dismal overnight session on Wall Street amid confusion over US-China trade progress, worries about the US economic outlook, and ahead of major events in coming days. Weak Australian GDP data also dampened investor sentiment. Most of ASX sectors declined, with energy, mining and banking stocks being notable losers. In late afternoon trades, the benchmark S&P/ASX200 index dropped 54.04 points, or 0.95%, to 5,659.10 points, while the broader All Ordinaries index fell 57.34 points, or 1%, to 5,740.20 points.
Risk aversion selloff triggered amid growing uncertainty about whether a truce struck between Chinese President Xi Jinping and US President Donald Trump at the G20 summit will lead to a long-term deal to ease trade tensions between the two superpowers.
Following the meeting between Trump and Xi in Argentina, there has been growing confusion about what exactly the leaders agreed to and whether a 90-day deadline for a resolution began immediately or in January.
Trump has threatened to impose tariffs worth a further $200 billion on Chinese imports unless China makes it easier for US companies to do business there. White House officials have also struggled to explain whether China had actually agreed to drop a 40% tariff on US cars as part of the deal.
The world's two largest economies seem to be providing conflicting versions of outcomes from last weekend's G20 Summit. The Washington Post suggested that China has not acknowledged a 90-day deadline for reaching a trade deal and has not said it would 'immediately' buy significant farm goods from the US. This morning however Reuters reported that China said it would implement specific issues agreed on as quickly as possible.
TPG shares rose after it avoided a second strike and the threat of a board spill at its annual general meeting on Wednesday.
ECONOMIC NEWS: The Australian Bureau of Statistics said that Australia's gross domestic product was up a seasonally adjusted 0.3% on quarter in the third quarter of 2018, down from 0.9% in the second quarter.
The latest survey from the Australian Industry Group revealed that the service sector in Australia continued to expand in November, and at a sharply faster rate, with a Performance of Service Index score of 55.1. That's up from 51.1 in October, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.
CURRENCY: Australian Dollar, seen as a proxy for China-related trades, was down against greenback on Wednesday. The Australian dollar was quoted at $0.7344, down from $0.7370 on Tuesday.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)