The ASX dived to a triple-digit loss this morning after the increased threat of a trade war fuelled Wall Street's biggest tumble in six weeks.
The ASX 200 fell 118 points or almost 2% to a five week low, sitting at 5819 at the mid-point of a brutal session. No sector escaped the washout, with the export-focused metals & mining sector hit hardest at -3.6% and defensive gold the best of a bad bunch with a loss of 0.3%. The financial sector slid 2.1, IT 1.8% and energy 1.6%.
The slump followed heavy losses on Wall Street and a further deterioration in US futures this morning after China announced retaliatory measures against the Trump administration's proposal to impose US$60 billion worth of tariffs on Chinese imports. The S&P 500 shed 2.52% overnight. S&P 500 futures were lately down 12.25 points or 0.46% after China countered the US announcement with plans to impose a range of tariffs on US goods.
“It’s a significant step in escalation in trade tensions between the U.S. and China,” Paul Eitelman, senior investment strategist at Russell Investments in the US, told Bloomberg. “The biggest watchpoint from here is how China responds to this and any potential escalation that creates going forward.”
Asian markets saw red. China's Shanghai Composite gave up 2.81%, Hong Kong's Hang Seng 3.45% and Japan's Nikkei 3.5%.
Crude oil futures surged 79 cents or 1.23% this morning to US$65.09 a barrel. Gold futures rallied $10.20 or 0.77% to US$1,343.40 an ounce. The dollar was buying 77.09 US cents.
The XJO certainly broke out of its symmetrical triangle, but not in the direction many will welcome. The index looks like re-testing 5800 in the near future - Monday, if those US futures prove accurate (and they often give a bum steer). Trading: not a day for heroics. I squeezed wins out of FYI and LSR and will leave it at that. Abandoning the desk shortly for a weekend away without the kids. Hurray!
