Australia Market falls on negative offshore lead

Headline indices of the Australian market closed down on Wednesday, 29 May 2019,as risk off selling triggered on tracking negative lead from Wall Street overnight amid lingering worries about the economic impact of the U.S.-China trade war. All ASX sectors declined, exception being telecommunication issue, with shares in industrials, consumer discretionary, staples, energy, materials and financials being notable losers. At closing bell, the benchmark S&P/ASX200 index dropped 44.83 points, or 0.7%, at 6,440 points, while the broader All Ordinaries fell 43.79 points, or 0.67%, at 6,536.60.

Stalled talks in the U.S.-China trade war have soured sentiment for risk assets, with the global economy already showing signs of fragility before the full impact of the most recent tariff hikes kicks in. Investors remained cautious, awaiting new developments between Beijing and Washington amid the ongoing trade tensions.

U.S. President Donald Trump said Monday the U.S. was not ready to strike a deal with China, before adding he expected one in the future. He also said tariffs on Chinese imports could go up substantially.

Beijing is gearing up to use its dominance of rare earths as a counter in its trade battle with Washington, according to in China that included hints from the state planning agency. A report in Chinese state media that suggested Beijing would restrict exports of rare earth, using the minerals as leverage in the trade dispute, also fanned anxiety. Rare earth is a key component in devices ranging from smartphones and cameras to televisions and any move to restrict their supply would have a devastating impact on manufacturers, with China producing more than 95% of the commodities.

Shares of materials and resources were lower, with Rio Tinto lower by more than 1%, BHP Group down 1% and Fortescue Metals down almost 1%.

Shares of banks and financials were lower. The big four banks - ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac - were down in a range of 0.4% to 1%.

Among individual stocks, Shares in highway health food retailer Oliver's were up 59% to 3.5 cents after it told the market it will return to profit in 2019-20. The company is booking a loss of A$5.3 million for the current financial year.

Lynas shares were up 13.8% to A$2.72 after the Company could eventually triple production from its 200 million-year-old rare earths deposit in Western Australia.

CURRENCY NEWS: The Australian dollar was down against the U.S. dollar on Wednesday. The Australian dollar was quoted at $0.6925, down from $0.6928 on Tuesday.

Powered by Capital Market - Live News