The Australian share market has fallen sharply as uncertainty remains about the implications of US steel and aluminium tariffs.
The benchmark S&P/ASX200 index dropped one per cent to 5,902 points, which follows a rise of 1.1 per cent on Tuesday.
Phillip Capital senior client adviser Michael Heffernan said safe haven gold stocks were among the few winners as uncertainty dominated markets around the world.
Japan's Nikkei 225 was down 0.8 per cent and Hong Kong's Hang Seng Index was down 0.7 per cent, as US stock market futures pointed to falls when trade resumes on Wall Street.
Mr Heffernan said concerns about White House economic adviser Gary Cohn's resignation after a debate about President Trump's tariff proposal were overcooked.
"All this uncertainty will simply evaporate when President Trump signs the piece of paper that makes these law," Mr Heffernan said.
Australia's big miners continue to be impacted by the retreating price of iron ore as the US tariffs threaten to dent global demand for steel.
BHP Billiton and Rio Tinto each dropped one per cent and Fortescue Metals was 1.9 per cent weaker.
Gold miner Newcrest gained 1.8 per cent and Evolution Mining added 1.4 per cent.
Among the major banks, Westpac was the worst performer, losing 1.6 per cent.
Energy producers were not lifted by a small rise in global oil prices, with Santos down 2.6 per cent, Oil Search down 1.4 per cent and Woodside Petroleum 0.7 per cent weaker.
The market gained ground after the release of December quarter economic growth figures at 1130 AEDT, but fell back again in the final two hours of the session.
GDP growth slowed to 0.4 per cent in the final three months of 2017, for an annual rate of 2.4 per cent, slightly below market expectations.
The Australian dollar gained almost a quarter of a US cent in the hour after the release of the data, and held onto those gains.
ON THE ASX:
* The benchmark S&P/ASX200 index was down 60.4 points, or 1.01 per cent, at 5,902.0 points
* The broader All Ordinaries index was down 56.1 points, or 0.93 per cent, at 6,005.4 points
* The SPI200 futures contract was down 54 points, or 0.91 per cent, at 5,900 points
* National turnover was 3.4 billion securities traded worth $6.2 billion
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 78.01 US cents, from 77.74 US on Tuesday
* 82.43 Japanese yen, from 82.57 yen
* 62.82 euro cents, from 62.95 euro cents
* 56.20 British pence, from 56.15 pence
* 107.06 NZ cents, from 107.34 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,332.46 per fine ounce, from $US1,322.95 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 1.9881pct, from 2.0103pct on Tuesday
* CGS 4.75pct April 2027, 2.7391pct, from 2.7624pct
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.22 (implying a yield of 2.78pct), from 97.195 (2.805pct) on Tuesday
* March 2018 three-year bond futures contract at 97.9 (2.1pct), from 97.88 (2.12pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)
Wall Street’s three main indexes fell on Wednesday as investors worried that U.S. President Donald Trump would deliver on his threat to impose steep import tariffs on imported steel and aluminum and cause a trade war after a key advisor resigned.
Investors also took the resignation, announced late Tuesday, of free trade supporter Gary Cohn from his position as Trump’s top economic advisor as a sign of conflict within the White House, adding to the uncertainties over trade.
“Investors who were worried about a trade war before the resignation are even more worried now that a voice for free trade has left the White House,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute in St. Louis, Missouri.
Cohn, the architect of a tax overhaul passed in December, was seen as a stabilizing force within the Trump administration. His departure is seen strengthening the hands of those advocating a protectionist agenda.
Spokeswoman Sarah Sanders told reporters the White House was on track to announce tariffs by the end of this week.
But markets trimmed losses after White House trade adviser Peter Navarro, who favors tariffs, said in a television interview he was not a candidate to replace Cohn.
Cohn’s exit made some investors less confident the administration would be able to continue to implement its pro-business agenda, said Christopher.
“Investors tend to exaggerate political risks and underestimate fundamental risks. We’d always put the economy first. The economy looks solid to us,” he said.
On top of the steel tariffs, Trump also told China to develop a plan to reduce its trade imbalance with the United States by a billion dollars.
At 2:44 p.m. ET, the Dow Jones Industrial Average .DJIfell 182.57 points, or 0.73 percent, to 24,701.55, the S&P 500 .SPX lost 9.67 points, or 0.35 percent, to 2,718.45 and the Nasdaq Composite .IXIC added 7.08 points, or 0.1 percent, to 7,379.09.
In contrast, the Russell 2000 index , which tracks U.S. small-cap stocks, was up 0.5 percent as more domestically focused companies are seen as having less exposure if foreign governments retaliate by slapping tariffs on U.S. exports.
The S&P energy sector .SPNY was the biggest percentage decliner of the S&P’s 11 sectors with a 1.4 percent drop, weighed down by a 2.3 percent drop in oil prices from data showing a rise in U.S. inventories and output. [O/R]
Investors were also disappointed by Exxon’s (XOM.N) decision not to announce a share repurchase plan, sending it down 3.2 percent.
Shares of U.S. manufacturers Boeing (BA.N), down 1 percent and Caterpillar (CAT.N), down almost 2 percent, were hit by worries about higher input costs as well as potential export trade barriers.
Declining issues outnumbered advancing ones on the NYSE by a 1.23-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored advancers.
The S&P 500 posted 11 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 128 new highs and 18 new lows.
Source: Netwealth Morning Business Roundup
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