ASX Closes Lower As US-China Trade Tensions Loom

  • May 06, 2019 AEST
  • Team Kalkine
ASX Closes Lower As US-China Trade Tensions Loom

The Australian Stock Exchange closed lower today after US President Donald Trump tweeted the plans to raise the tariff on Chinese goods to 25 per cent on $200 billion of Chinese goods. The rebounding trade tensions between the US and China further jolted the market participants and investors globally.

The S&P/ASX200 index opened lower at 6,295.7 points, down by 40.1 points, or 0.63 per cent today. During the first 30 minutes of trade on Monday, almost all the sectors were trading in negative.

The benchmark S&P/ASX200 index closed lower at 6283.7 points, down by 52.1 points, or 0.80 per cent. The All Ordinaries index was also down by 57.3 points or 0.9 per cent to 6369.9 points.

The Australian dollar also fell upon the resumption of trade; it traded lower at US69.81¢.

China's biggest stock market fell more than 4 per cent when markets opened today. The Chinese central bank also notified about lowering reserve requirement ratios (RRRs) for small to medium banks in an effort to boost the economy. Shanghai Composite Index closed 5.6% lower at the end of market trading.

Crude Oil tumbled to its Day’s Low of $69.84 (GMT-4 3:49 AM).

The top five indices that ended up lower today includes CIMIC Group Limited (ASX: CIM) down by 7.07 per cent at AUD 46.50, Bellamy's Australia Limited (ASX: BAL) was down by 6.99 per cent at AUD 9.72, Emeco Holdings Limited (ASX: EHL) fell by 6.76 per cent to AUD 1.93, Tassal Group Limited (ASX: TGR) dropped by 6.13 per cent to AUD 4.75 and Pinnacle Investment Management Group Limited (ASX: PNI) declined by 5.65 per cent to AUD 5.84.

The CIMIC Group’s stock price fell after a Hong Kong-based research firm GMT accused the firm of overvaluing its pre-tax profits to $800 million.

Afterpay Touch Group (ASX: APT) also ended up lower at AUD 27.500, down by 0.542 per cent in comparison to the previous day’s market price. The company recently announced that it had partnered with Citi for a US$300 million receivables funding facility for a term of 24 months.

On the other hand, the top gainers on ASX were St Barbara Limited (ASX: SBM), Pilbara Minerals Limited (ASX: PLS), Vocus Group Limited (ASX: VOC), Regis Resources Limited (ASX: RRL) and Domain Holdings Australia Limited (ASX: DHG).

Almost all the sectors closed in red today except the ‘Utilities’ sector that rose by 0.22 per cent to 8,121.3 points. Information technology had the worst close today, ending up 1.91 per cent lower.

The Reserve Bank of Australia was expected to cut the interest rates this week, but with upcoming elections, the rate cut might be delayed for some time. It is anticipated that the reduction in interest rate would be a record-low of 1.25 per cent. The speculations in rate cut arose after the disappointing inflation data released by the Australian Bureau of Statistics.


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