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Trade battle between the US and China could derail prospects of the global economic growth and, as a result of this, investors might decide to avoid making deployments towards equities. It looks like that the investors are fearing repercussions of the trade battle which has now become worse as China has made an announcement of retaliatory tariffs. The war between the US and China could weigh over prospects of global growth and could negatively impact sentiments of the market players.
If threats to global growth increase, market players might decide to sell their existing holdings in stocks and can increase their deployments towards safer assets. Therefore, to bring stability in the global stock markets, the trade battle needs to end on a permanent basis. Talking about the performance of the US stock markets, Dow Jones Industrial Average ended the session in red, as the index witnessed a fall of 623.34 points or 2.37% on an intraday basis to close the session at 25,628.90. Also, on the same day, S&P 500 Index witnessed a fall of 75.84 points or 2.59% to end the session at 2847.11.
Oil Prices Remain Sensitive to Oil Demand
It can be said that the prices of oil are sensitive to the demand for oil and, if the economic uncertainties increase, the demand might get influenced. An escalation in the trade battle between the US and China could affect the oil demand, which could, in turn, affect the oil prices. Also, movements of the equity markets could affect the prices of oil.
Australian Markets Ended in Red: S&P/ASX200 Falls by 1.3%
The stock markets in Australia are very sensitive to conditions of the global economy and to events related to the trade battle between the US and China. A rise in economic uncertainties can dent the global growth prospects and, as a result, Australian investors might liquidate their holdings of stocks. It can be said that the settlement of trade war is of utmost importance as end to the war can positively impact the Australian stock markets. Talking about the performance, on August 26, 2019, S&P/ASX200 closed the session in red, as the index witnessed a fall of 83 points or 1.3% on an intraday basis. Also, All Ordinaries fell by 83.3 points or 1.3% to close the session at 6531.
Let us have a look at how the Australian stocks performed. Resolute Mining Limited (ASX: RSG) and Saracen Mineral Holdings Limited (ASX: SAR) have ended the session in green, as the prices of these stocks have witnessed a rise of 10.345% and 9.51%, respectively, on an intraday basis. On the other hand, Boral Limited (ASX: BLD) encountered a fall of 20.565% to end the session at A$3.940 per share and G8 Education Limited (ASX: GEM) closed the session by falling 16.058% on an intraday basis.
We have provided some crucial information on three stocks which are operating in the industrial sector (i.e. BLD, TCL and DOW). In order to have a quick look, please click here.
RSG Daily Technical Chart (Source: Thomson Reuters)
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