ASX set for weak start on US-China tension

The Australian share market is likely to edge lower in early trade after Wall Street closed down following fresh tensions between the US and China.

The local SPI 200 futures contract was lower by 7 points, or 0.13 per cent, to 5,537.0 at 0800 AEST on Friday, indicating little direction in early trade.

Earlier, US indices finished poor;y after President Donald Trump said the United States would react strongly if China imposed national security laws for Hong Kong, and US Secretary of State Mike Pompeo criticised Beijing’s handling of the coronavirus outbreak.

A Chinese official said the country will not flinch from any escalation in tensions.

As a result, the Dow Jones Industrial Average fell 0.41 per cent to end at 24,474.12 points, while the S&P 500 lost 0.78 per cent to 2,948.51. The Nasdaq Composite dropped 0.97 per cent, to 9,284.88.

Australia’s relations with China have also been strained after it lobbied for an international investigation into the origins of the coronavirus pandemic.

Australia’s biggest export – iron ore – could face the heat next after Chinese officials change the way iron ore imports are inspected at their ports.

Traders will also have an eye on China’s National People’s Congress, with the government to unveil a raft of economic stimulus policies, which could boost stocks around the world.

In Australian equities, Sydney Airport will hold its annual general meeting.

Airport revenue has been decimated by flight restrictions imposed to stop the spread of the virus.

The Australian share market on Thursday ended a four-day streak of closing higher.

The S&P/ASX200 benchmark index finished down 22.6 points, or 0.41 per cent, at 5,550.4 points, while the All Ordinaries index closed down 19.2 points, or 0.34 per cent, at 5,660.9.

The Australian dollar was buying 65.60 US cents at 0800 AEST, down from 65.71 US cents at the close of trade on Thursday.

Comments

Comment Manually