XFJ 0.38% 7,458.6 s&p/asx 200 financial

Miners and financials drag index lower Property developers and...

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    • Miners and financials drag index lower
    • Property developers and builders rise to offset losses
    • Investors not expecting trade deal anytime soon -analyst

    Australian shares slipped on Wednesday as investors worried that the lack of progress in talks between the United States and China could signal a protracted trade war and harm the Australian economy.

    The S&P/ASX 200 index (xjo) fell 18.3 points or 0.3% to 6,481.8 at 0106 GMT. The benchmark rose 0.4% on Tuesday.

    China is Australia's biggest trading partner and the negative impact of the trade war on the Chinese economy could harm demand for Australian products.

    "There is a lot of posturing and chest beating from U.S. President Donald Trump and it just makes it hard to really get a feeling in the market. Investors are just not convinced," said Damian Rooney, director of equity sales at Argonaut.

    "Chinese leader Xi Jinping saying they were starting on a new 'Long March' doesn't really sound like a quick fix," he added.

    President Xi Jinping called for a new Long March in a speech at Jiangxi, where Mao Zedong began his ascent to power during a series of retreats by the Red Army to evade pursuing Nationalist forces, state media reported.

    Investors took it as a sign that China is preparing for a protracted trade war, with no clear path to a trade deal in the near future.

    Financials .AXFJ fell 0.8% after a near 8% rally over the previous two sessions.

    Commonwealth Bank of Australia (CBA) and Australia and New Zealand Banking Group (ANZ) each fell 0.9%.

    Lenders were also hit after Australia's financial regulator said it may impose additional capital requirements on some financial institutions after it found weakness in their ability to self-assess non-financial risk.

    Miners .AXMM fell 0.5% despite record high iron ore prices. Fortescue Metals Group (FMG) fell as much as 9% as its shares traded ex-dividend.

    Mining giant BHP Group (BHP) and rival Rio Tinto (RIO) fell as much as 0.8% and 0.5%, respectively.

    Gold stocks .AXGD slipped nearly 1.2%. Top miner Newcrest Mining (NCM) fell as much as 1.2% while Northern Star Resources (NST) shed 1.8%.

    Offsetting losses on the index, property and building material manufacturers continued to rise, boosted by Australia's prudential regulator easing lending criteria for home loans.

    James Hardie (JHX) rose 2.4%, Adelaide Brighton (ABC) added 6.1% while property developer Stockland Corporation (SGP) tacked on 3.3%. Boral (BLD) gained 1.4%.

    New Zealand's benchmark S&P/NZX 50 index (nz50) rose 0.1% or 10.78 points to 10,226.87.

    Utilities provider Infratil (IFT) rose 6.4% while dairy giant a2 Milk Company (ATM) edged higher.

 
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