Falls across the energy, resource and health care sectors pushed the Australian share market into the red on Tuesday, amid increasing investor fears of a global trade war.
The benchmark S&P/ASX200 index closed down 12.8 points, or 0.21 per cent, at 6,197.6 while the broader All Ordinaries was down 16.6 points, or 0.26 per cent, at 6,292.1 points, following big falls on global markets overnight.
Investors are becoming increasingly concerned about US President Donald Trump’s tariff threats.
The US government is reportedly drafting curbs that would block firms with at least 25 per cent Chinese ownership from investing in US technology companies, which hit the Wall St tech sector hard overnight.
President Trump has already threatened to impose new tariffs on $US200 billion worth of Chinese goods.
Patersons Securities economist Tony Farnham said gains for the banks had helped the market recover from early losses.
Mr Farnham said CBA recovered some of Monday’s fall after the bank announced plans to demerge and separately list its wealth management and mortgage broking operations.
CBA closed 0.9 per cent higher at $72.81, with rivals National Australia Bank and ANZ gaining 0.4 and 0.3 per cent, respectively.
Mining stocks fell on a retreat in steel prices, with Sims Metal, Rio Tinto and BlueScope down between 1.8 and 3.1 per cent and BHP one per cent lower at $32.64.
BHP also announced a new agreement with Brazilian authorities that set terms for settling a lawsuit over the fatal Samarco mine disaster in 2015.
Energy players Woodside Petroleum, Santos and WorleyParsons lost ground after oil prices tumbled as the market braced for increased crude output.
The Australian dollar was trading at 74.07 US cents at 1700 AEST on Tuesday, down fractionally from 74.18 US cents on Monday as confusion about US-China trade relations left the market in a holding pattern.
ON THE ASX:
* The benchmark S&P/ASX 200 index closed down 12.8 points, or 0.21 per cent, at 6,197.6 points
* The broader All Ordinaries index was down 16.6 points, or 0.26 per cent, at 6,292.1 points.
* The SPI200 futures contract was down three points, or 0.05 per cent, at 6,152 points at 1630 AEST.
* National turnover was 3.1 billion securities traded, worth $6.1 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.07 US cents, from 74.18 on Monday
* 81.25 Japanese yen, from 81.196 yen
* 63.36 euro cents, from 63.78 euro cents
* 55.82 British pence, from 56.03 pence
* 107.68 NZ cents, from 107.62 cents
The spot price of gold in Sydney at 1700 AEST was $US1,263.317 per fine ounce, from $US1,265.64 per fine ounce on Monday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent May 2021, 2.0946, from 2.092pct on Monday
* CGS 4.75pct May 2028, 2.6417pct, from 2.6308pct
Sydney Futures Exchange prices:
* September 2018 10-year bond futures contract at 97.345 (implying a yield of 2.655pct), from 97.36 (2.64pct) on Monday
* September 2018 3-year bond futures contract at 97.885 (2.115pct), from 97.885 (2.115pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)