While the Trump victory drove US indices sharply higher overnight, Asian markets have been mixed as the potential economic implications of his proposed policies are assessed, including tax cuts and increased tariffs, particularly targeting China.
The proposed measures are anticipated to stimulate business activity in the short term; however, analysts caution that they could also reignite inflationary pressures.
Locally, the ASX closed up just 0.33% at 8,226.3 points.
Among the sectors, Energy was the standout performer while the rate-sensitive Real Estate sector took a hit.
The prospect of heightened inflation presents a challenge for US Federal Reserve chair Jerome Powell, who aims to guide the economy toward a soft landing while maintaining price stability.
The Federal Reserve is expected to announce a 25 basis point interest rate cut on Thursday (US time). However, the likelihood of further rate cuts in the coming months, as well as the outlook for the new year, remains uncertain.
National Australia Bank CEO Andrew Irvine has highlighted the potential risks from an escalating trade conflict between the United States and China, particularly if former President Donald Trump proceeds with proposed tariffs on US imports.
“I do worry about a global trade war between the two biggest global economies in the US and China,” said Irvine.
Yet he added, “Markets like certainty, and we now have certainty, and we know what we’re going to be dealing with for the next four years in terms of who’s going to be in power in the US. And I think, on balance, that’s positive.”
The ACCC has approved the merger between Sigma Healthcare and Chemist Warehouse, a deal valued at A$8.8 billion that will result in the combined entity owning some 16% of Australian pharmacies
ACCC chair Gina Cass-Gottlieb said the merger was unlikely to substantially reduce competition, especially considering a court-enforceable undertaking from Sigma.
Sigma’s shares surged following the announcement and closed up 25.45%.
Small cap movers
Gains among the small cap sector were registered by AuKing Mining Ltd (ASX:AKN), which increased as much as 40% to $0.007 and Tryptamine Therapeutics Ltd hit a new high of more than 18 months at $0.043, up 16.22% on the previous close.
Magnetite Mines Ltd (ASX:MGT) was up 11.11% to $0.15, Gold Hydrogen Ltd (ASX:GHY) followed a 6.88% increase yesterday with another 10.87% jump to $0.765, Lightning Minerals Ltd (ASX:L1M) increased 7.14% to $0.075 and Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) was 6.4% higher intra-day to $0.10.
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