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The Australian Stock Exchange (ASX) opened lower today ahead of trade talks between the US and China later this week with accelerated selling on Wall Street on Tuesday.
Within 15 minutes of trade, the benchmark index S&P/ASX200 dropped lower at 6,244.4 points, down 51.3 points, or 0.81 per cent in comparison to the previous close of 6295.7 points; all the sectors were also trading in the red zone.
The S&P/ASX200 is currently trading at 6261 points, down by 34.7 points or 0.6 per cent (As on 2:45 PM AEST). All the sectors are currently in negative territory on ASX and the worst performing sector is the Information Technology which is down by 2.12 per cent followed by Energy and Consumer Staples sector.
Treasury Wines Estates (ASX:TWE), Afterpay Touch (ASX:APT), HUB24 (ASX:HUB) , Nearmap (ASX:NEA) and WiseTech Global (ASC: WTC) are all trading lower.
The US stocks slumped on Tuesday due to intensifying trade tensions between the US and China. The situation has raised the concerns over global growth, and the investors are moving away from unsafe assets. The Dow Jones Industrial Average dropped 1.8 per cent while the S&P 500 fell 1.7 per cent. All of the 30 components on Dow Jones Industrial Average closed in red yesterday. Boeing (-3.87 per cent), United Technologies (-3.4 per cent) and Apple (-2.7 per cent) were leading in the list of the worst hit stocks.
The impact of the trade tensions spread over to the European market as well as it closed lower, down by 1.6 per cent yesterday.
The trade tensions emerged after US President Donald Trump tweeted to increase the tariff to 25 per cent on Chinese goods; post which the Australian equity market closed in red and gold prices rose in the international market.
Despite US Presidentâs threat, Vice Premier Liu He would participate in the delegation of Chinese officials who will carry out further trade talks with the Trump administration in the coming days. It was doubtful that the Vice Premier would visit the US for trade talks after Mr Trumpâs statement, but Chinaâs Commerce Ministry confirmed his visit yesterday.
According to the market analysts, if the trade dispute between the US and China continues, the situation would become similar to the one witnessed last summer when the US imposed tariffs on $US50bn of imports from China. At that time, the equity market performed poorly across the globe.
There has been massive fluctuations in the Australian stock market recently due to several global factors.
A day before, the Reserve Bank of Australia kept the interest rates unchanged against the speculations of the rate cut. It was expected that RBA would cut the cash rate by 25 basis points after the inflation figures released by the Australian Bureau of Statistics for the March quarter missed the target. Last week, the US Federal Reserve also notified about keeping the interest rates steady against the US Presidentâs demand for slashing the prices.
The Australian Bureau of Statistics also released the retail turnover figures for March 2019 yesterday. The result of the retail turnover and trade surplus data was above the expectations of economists.
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