Shares pared two weeks of creeping losses this morning after US stocks fell less than expected overnight and resource stocks benefitted from gains in select commodities.
At 1pm EST the ASX 200 was 20 points or 0.35% stronger at 5631 and within reach of its first rise in three sessions. The metals & mining sector led the advance, improving 1.5%. Providing support were materials +1.4%, health +1% and gold +0.7%. The utilities sector declined 1.5%, IT 0.4% and consumer discretionary 0.2%.
US stocks retreated after the Trump administration outlined a string of protectionist measures, including a border tax, withdrawal from from the Trans-Pacific Partnership and a pledge to renegotiate the North American Free Trade Agreement.
"Markets tended to concentrate on the Trump administration's stimulus plans while discounting its trade protection plans in the period between the election and inauguration," CMC chief market analyst Ric Spooner told Fairfax. "In fact, the first couple of days of the new Presidency have seen the rhetoric weighted toward protectionist policies while little detail [is] yet available on stimulus measures."
Asian markets traded mixed amid speculation that some might benefit from the Trump trade moves. China's Shanghai Composite slipped 0.14%, Hong Kong's Hang Seng gained 0.35% and Japan's Nikkei was little changed at -0.04%. Dow futures gained three points or 0.02%.
Crude oil futures put on 27 cents or 0.51% this morning to US$53.02 a barrel. Gold futures were 70 cents or 0.06% firmer at US$1,216.30 an ounce. The dollar was buying 75.86 US cents.
Unease over US policy has not yet turned to outright panic, but that seems possible unless Trump announces something to stimulate business activity. So far it all looks like populist turn-back-the-clock fantasy stuff that will play well with his constituency until the economic impact is felt. Bring back US manufacturing jobs? Dreaming. He looks like Pol Pot/Mao without the genocide. Trading: got something out of FNP and NOR. Small dabble in WFE but willing to exit for brokerage.
