US market tumbled overnight following President Trump’s signing of a memorandum to order US$60 billion worth of tariffs on Chinese exports to the US. The US trade deficit with China was US$375 billion in 2017. The US Trade Representative (USTR) now has 15 days to come up with a proposed list of products that will face the increased tariffs. China has also responded in kind with possible reciprocal tariffs of US$3 billion against a range of US products including wine, fruit pork and steel pipes. Overnight the Dow fell 724 points or 2.9% in response.
The Aussie market has not escaped the slide in global markets with the ASX 200 suffering its worst day in six weeks, currently trading 105 points or 1.8% lower and all sectors deeply in the red. Only two of the top 200 stocks are in positive territory. The financials and materials sectors are the main drags on the market with the mining sector suffering the biggest fall towards lunch. Base metal prices fell back overnight after several positive sessions. Major miners BHP and Rio Tinto (RIO) are both weaker by 3.9% and 4.8% respectively with mineral miners Iluka (ILU) and Mineral Resources (MIN) both slumping around 5%. All four big banks are declining more than 1% with Westpac (WBC) and Commonwealth Bank (CBA) the hardest hit.
There are only a handful of stocks in positive territory with several smaller gold miners among them. Perseus Mining (PRU) is up 1.2% while Resolute Mining (RSG) is 1.8% higher. Outside of the gold miners, Domino’s Pizza (DMP) is lifting 1.5% while airliner Virgin Australia (VAH) is gaining 1%. Embattled franchisor of brands such as Gloria Jeans and Donut King, Retail Food Group (RFG) is up 0.9%.
In company news, toll road operator Transurban (TCL) has acquired the A25 toll road and bridge in Montreal Canada for CAD$840 million plus $18 million in transaction costs. TCL is looking to take over control of the operations by the fourth quarter of FY18. TCL shares have slipped 0.5% so far. Meanwhile, Qantas (QAN) has received authorisation from the ACCC to continue its alliance with Emirates for a further five years. QAN shares are 1.5% lower.
The Aussie dollar fell from highs near US77.60 cents to lows near US76.85 cents in the US session and currently trades near US77.05 cents with no major economic data due for release today. So far, 1.4B units have traded worth $2.2B with only 228 stocks higher 829 lower and 301 unchanged.
Published by CommSec