Australian shares are set to open lower, with ASX 200 futures down 1% to 8,203 points.
A fall on Wall Street, driven by profit-taking following post-election gains and caution ahead of upcoming US inflation data, has weighed on global sentiment.
The S&P 500 slipped 0.2% to 5,899 points, while the Nasdaq fell 0.1% to 19,284 points as technology and growth stocks pulled back amid inflation concerns.
Stocks on sugar high from Trump win
Some Australian stocks with US exposure enjoyed gains as markets priced in potential growth-oriented policies under Trump.
Bluescope Steel is positioned for gains from Trump’s proposed tax cuts and tariffs, which may support US-based manufacturing. With five North American operations, Bluescope would benefit from protectionist policies favouring domestic producers.
Also notionally benefiting from the mood in the US, Neuren Pharmaceuticals partnered with US-based Acadia Pharmaceuticals, with royalties in that country for trofinetide reaching $37.5 million year-to-date as of September 2024.
Zip (ASX:ZIP) Co Ltd (ASX:ZIP, OTC:ZIZTF) reported 18.8% revenue growth in Q3 2024, with 57% derived from the US market, as the company benefits from robust consumer spending and potential tax incentives in the US.
ASX losers: commodities and China-exposed stocks
On the other hand, stocks with significant China exposure or linked to raw materials suffered as concerns continued to rumble over Trump’s potential 60% tariff on Chinese imports and a stronger US dollar.
IGO Ltd declined 5.6% to $5.06, affected by lower copper and lithium prices, as tariff concerns dampened demand forecasts for key commodities.
Liontown Resources (ASX:ASX:LTR) fell 4.3% to $0.79 as lithium-linked stocks faced downward pressure from uncertainty in the Chinese market.
A2 Milk Company dropped 2.9% to $5.32, hit by potential tariffs on Chinese imports, where A2 Milk has considerable market exposure.
Some critical economic data is set to be released today, including US inflation figures and Australian wage growth data – investors will be watching for signals on central bank policy directions.
Growth-oriented stocks and commodity exporters are expected to remain in focus as market sentiment continues to shift in concert with geopolitical ruptures.
Wage data out
The Australian Bureau of Statistics (ABS) is also set to release September quarter wage data this week, which is expected to show wage growth outpacing inflation; in the year to June, wages climbed 4.1%, reflecting the tight labour market.
European markets were uncertain, with the FTSE 100 dropping 1.2% to 8,025 points, while EuroStoxx slid 2% to 502 points, pressured by ongoing economic and political concerns and cautious trading around global interest rate policies.
Commodities and currencies
The Aussie dollar was down 0.6% to 65.36 US cents, reflecting a shift towards the US dollar as investors await inflation data that could influence the Federal Reserve’s policy path.
Commodities traded lower overall, with safe-haven assets like gold retreating.
Spot gold fell 0.8% to US$2,600 per ounce as the US dollar strengthened, diminishing demand for non-yielding assets.
Brent crude was slightly up by 0.1% to US$75.64 per barrel, buoyed by steady demand forecasts despite concerns over global economic conditions.
Iron ore remained steady at US$100.65 per tonne as investors monitor industrial activity in China, the world’s largest importer.
Bitcoin was up 2% to US$89,818, continuing its recent volatility with growing interest as a speculative hedge against inflation.