After having its best gain of the year on Friday and hitting a three-week high, heavy losses from mining and energy stocks are pushing the market lower this morning. The ASX 200 index is down 0.1 per cent following a weak lead from Wall Street, fears of escalating US-China trade tensions, a firmer greenback and lower commodity prices.
Days ago President Trump announced tariffs covering US$50bn of China goods. On Saturday, China said it would impose its own set of 25 per cent tariffs. The risk of the situation escalating has kept markets defensive, pushing the US dollar higher and in turn pushing commodity prices lower.
All the major miners are down by ~2 per cent today mainly due to heavy losses from most commodities. Trade tensions was a reason the US dollar rose on safe haven buying.
South32 (S32) is down 2.5 per cent and said it will pay US$1.3bn in cash to take over Canada-based miner Arizona Mining (a zinc exploration company). All the major miners are down by ~2 per cent today.
Atlas Iron (AGO) has entered a trading halt pending the release of an announcement regarding a control transaction proposal.
Bubs Australia (BUB) is down 2.5 per cent after resuming trade this morning. The infant formula company has raised $40m by selling new shares at $0.75/each (16 per cent below its share price on Friday).
Keep in mind that despite this morning’s modest losses, Aussie shares have improved for two straight weeks, are hovering near three-week highs and Friday was the market’s best day of 2018 so far, with shares lifting by 1.3 per cent.
While last week was one of the busiest of the year with US rates being raised, signs of some slowing in Australian jobs growth and a summit between President Trump and Kim JongUn, this week is likely to be quieter as far as data goes. A highlight will be a key meeting of oil producing nations in Vienna on Thursday and Friday. A potential lift in oil production could have an impact on oil prices in coming weeks.
1.4bn shares have changed hands so far today worth $1.8bn. 479 stocks are up, 573 are down and 396 are unchanged.
Published by CommSec