Australia Market falls on Sino-US trade jitters

Headline indices of the Australian share market were marginal lower in volatile trade on Thursday, 10 October 2019, despite a solid lead from Wall Street overnight, as China's has lowered expectations for significant progress from this week's trade talks due to the US Commerce Department's inclusion of top Chinese artificial intelligence startups in a trade blacklist. Around late afternoon, the benchmark S&P/ASX200 index eased marginal 2.92 points, or 0.04%, to 6,543.80, while the broader All Ordinaries softened 5.71 points, or 0.09%, to 6,661.30.

The US stock market finished higher for the first time in three sessions on Wednesday, 09 October 2019, as risk sentiments boosted up on hopes of progress in US-China trade talks after reports that China was open to a partial trade deal. However, market gains were capped after Beijing has lowered expectations for significant progress from this week's trade talks due to the US Commerce Department's blacklisting of 28 Chinese companies. At closing bell, the Dow Jones Industrial Average rose 182.1 points, or 0.7%, to 26,346.14, the S&P 500 gained 26.3 points, or 0.9%, to 2919.4 and the Nasdaq Composite added 79.96 points, or 1%, to 7903.74.

Investor sentiment got hurt after reports that Beijing has lowered expectations for significant progress from this week's trade talks due to the US Commerce Department's blacklisting of 28 Chinese companies. Further reports have since stated that the lower-level talks have been unsuccessful in garnering any co-operation and the two day talks could be reduced to just one day.

Market participants remained focused on the resumption of trade talks in Washington D.C. between the U.S. and China with import tariffs set for $250 billion worth of Chinese goods at a rate of 30% from 25% on 15 October 2019. A 15% tariff on an additional $160 billion worth of Chinese imports is also expected to kick in on 15 December 2019. The world's two largest economies have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

Shares of the big four banks have lost earlier gains with only Westpac Bank (WBC) was higher at 0.1%.

Miners were mixed as iron ore fell 4% on demand concerns out of China. BHP Group (BHP) and Rio Tinto (RIO) were both slightly down while Fortescue Metals (FMG) and diversified miner, South32 (S32) were down over 2%.

In company news, Orora (ORA) shares inclined 17% after announcing the sale of its Australasian Fibre Business to Japanese firm, Nippon Papers for an enterprise value of A$1.72 billion.

Pallets maker Brambles gained about 3.5% after it reported a higher first-quarter revenue. The Company first-quarter sales revenue rose 2% to US$1.16 billion while its Pallets business, CHEP saw revenue growth across all regions.

Resolute Mining (RSG) shares fell 15% after the gold miner advised that a key component at its Syama operations was taken offline due to crack in an external shell.

Clinuvel Pharmaceuticals (CUV) was down 11% after soaring 60% yesterday on news it had received FDA approval to market a skin treatment in the US.

CURRENCY NEWS: The Australian dollar declined against greenback on Thursday, as home lending data was mixed for August with the value of investment lending beating expectations but growth in owner occupied loans underwhelmed. The Australian dollar, sensitive to shifts in broader risk appetite, changed hands at $0.6741 after seeing levels above $0.675 earlier in the week.

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