Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Australian shares rattled by escalating trade tensions; NZ unchanged

Published 11/07/2018, 12:03 pm
Updated 11/07/2018, 12:10 pm
© Reuters.  Australian shares rattled by escalating trade tensions; NZ unchanged

© Reuters. Australian shares rattled by escalating trade tensions; NZ unchanged

* Aussie shares fall on renewed trade tensions

* Financials and materials stocks biggest drag

* NZ industrials slip, utilities perk up

By Aditya Soni

July 11 (Reuters) - Australian shares stepped back on Wednesday as financial markets were jolted by escalating trade tensions after Washington said it would impose tariffs on a further $200 billion of Chinese imports.

The S&P/ASX 200 index .AXJO declined 0.6 percent or 38.80 points to 6,219.30 by 0200 GMT. The benchmark dipped 0.4 percent on Tuesday.

"(Markets are down on) the fear of the eventual repercussions of the escalation in the trade war," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader

"At one point this morning the spot futures were up, that was before the announcement of the tariffs on $200 billion worth of imports...we're now down as Australia is kind of caught between two protagonists."

Financials .AXFJ , which account for nearly half of the Aussie benchmark, were the worst hit sector as they dipped 0.7 percent.

Index heavyweight Commonwealth Bank of Australia CBA.AX slipped 0.9 percent, while Australia and New Zealand Banking Group Ltd ANZ.AX dropped 1 percent.

"The banks are coming down because everyone else is down but it's also because CBA two says ago at A$76 simply didn't make sense," McKenna said.

Materials stocks, especially miners, were also under pressure. A slowdown in the world economy caused by rising trade tariffs could hit commodities prices, hurting Australian miners that rely heavily exports.

Global miner BHP BHP.AX fell 1.6 percent and was the biggest drag on the benchmark, while Rio Tinto (LON:RIO) Ltd RIO.AX dipped 1.9 percent.

Energy stocks were also lower, undermined by a slump in oil prices. Energy Ltd ORG.AX dipped 3.5 percent to a near four-week low, while Oil Search Ltd OSH.AX slipped 0.5 percent.

However, some consumer staples stocks rose after a measure of Australian consumer sentiment jumped in July to its highest since late 2013. Group Ltd WOW.AX rose 1.6 percent to near a three and a half year high, while Australia-listed shares of a2 Milk Company Ltd A2M.AX firmed 1 percent.

Across the Tasman Sea, New Zealand shares were unchanged, with the benchmark S&P/NZX 50 index .NZ50 falling 3.39 points to 9,019.54.

Industrials led the declines, with Auckland International Airport Ltd AIA.NZ falling 0.7 percent, while Tourism Holdings Ltd THL.NZ slipped 1.3 percent.

But utilities firmed, braking the benchmark's fall. Contact Energy Ltd CEN.NZ rose 0.9 percent, while Mercury NZ Ltd MCY.NZ strengthened 0.8 percent.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.