The Australian share market has closed flat after a choppy session dominated by US President Donald Trump’s threat to slap China with even more trade tariffs.
The benchmark S&P/ASX200 index was down 0.1 points at 5,788.7 points on Friday, and the broader All Ordinaries index was down 1.1 points at 5,886.9 points, with healthcare and the financial stocks the biggest drags and energy the best performing sector.
Just before Friday’s local session, US President Donald Trump announced that he’s considering slapping tariffs on another $100 billion worth of Chinese imports, on top of the tariffs on $US50 billion of goods from China that he proposed in March.
Mr Trump’s comments triggered more fears of a US-Chinese trade war, leading to a sharp sell-off in US equity futures.
The US equity futures’ fall drove the Australian share market and the Australian dollar lower during morning trade.
But the local bourse recovered its losses by 1300 AEST and began to climb higher as investors focused on expected positive US job figures, before falling slightly again.
“It has been a bizarre day where we were going to start higher but that didn’t come to pass because of Trump’s fireball,” Patersons Securities economist Tony Farnham said.
“Things settled because there’s news that is much more tangible than politicians to-ing and fro-ing about trade tariffs.
“But in the background, we were always going to have a cautious market because people are looking ahead at US job numbers and wages growth figures out tonight.”
Mr Farnham said the weaker Australian dollar was likely the main reason behind falls in the US-exposed healthcare companies, including CSL and Cochlear which were both off by 0.8 per cent and 0.9 per cent, respectively.
Commonwealth Bank senior currency strategist Elias Haddad said the Australian dollar dipped against the US dollar during morning trade after Trump announced his new tariff plan but then recovered most of its losses before falling again, albeit slightly.
“This may be a sign market participants are not convinced more protectionist US/China trade policies will be enough to derail the global economic expansion,” Mr Haddad said.
“At this stage, the economic impact of planned US/China tariffs are still negligible.”
On the local share market, three of the big four banks, Westpac, Commonwealth Bank and National Australia Bank, were all slightly lower.
ANZ bucked the trend to rise 0.2 per cent to $26.85 after it agreed to make a $3 million payment following its failure to provide annual reviews to more than 10,000 customers.
Energy stocks were higher following an increase in the price of oil overnight.
Woodside Petroleum climbed 1.1 per cent to $30.11, Santos rose 0.5 per cent to $5.88 and Oil Search gained 1.0 per cent to $7.31.
AGL dropped 15 cents, or 0.7 per cent, to $21.14 after federal Resources Minister Matt Canavan continued to pressure the company to sell its Liddell power station.
The major miners were mixed, with BHP Billiton up 0.5 per cent at $28.64, Fortescue Metals added 2.4 per cent to $4.32, and Rio Tinto eased 0.1 per cent to $73.22.
Among other stocks, Myer jumped 2.5 cents, or 7.3 per cent, to 37 cents following a media report that arch-rival David Jones may be interested in buying the embattled department store chain.
Meanwhile, the Australian dollar was worth 76.71 US cents at 1630 AEST, down from 76.93 US cents on Thursday.
ON THE ASX AT THE CLOSE:
* The benchmark S&P/ASX200 was down 0.1 points at 5,788.7 points
* The broader All Ordinaries index was down 1.1 points, or 0.02 per cent, at 5,886.9 points
* The SPI200 futures contract was steady at 5,772 points
* National turnover was 2.17 billion securities traded worth $3.61 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 76.69 US cents, from 76.73 cents on Thursday
* 82.38 Japanese yen, from 82.36 yen
* 62.68 euro cents, from 62.75 euro cents
* 54.8 British pence, from 54.75 pence
* 105.81 NZ cents, from 105.55 cents
The spot price of gold in Sydney at 1700 AEST was $US1,324.436 per fine ounce, from $US1,325.923 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.029pct, from 2.0427pct on Thursday
* CGS 4.75pct April 2027, 2.6289pct, from 2.6383pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.33 (implying a yield of 2.67pct), from 97.32 (2.68pct ) on Thursday
* June 2018 3-year bond futures contract was 97.83 (2.17pct), from 97.82 (2.18pct)