Australia Market plummets amid global sell-off on US-China woes

Headline indices of the Australia share market extended losses for fifth straight session on Tuesday, 06 August 2019, as investor risk sentiments weighed down by tracking losses on Wall Street overnight amid escalating U.S.-China trade conflict after Washington designated Beijing a currency manipulator and China halted purchases of U.S. farm goods. Every sectors of ASX sectors declined, with financials, energy, materials, industrials and technology issues being notable losers. At closing bell, the benchmark S&P/ASX200 index tumbled 162.20 points, or 2.44%, to 6,478.1. Meanwhile the broader All Ordinaries index, which tracks the nation's 500 biggest listed companies, declined 164.21 points, or 2.45%, to 6,546.4.

The Tuesday session in Australia market followed overnight declines on Wall Street, where the Dow Jones Industrial Average plunged more than 700 points, the S&P 500 dropped nearly 3% and the Nasdaq Composite fell 3.5%, due to souring relationship between the world's two most powerful economies.

Investors around the world scrambled to sell on worries about how much President Donald Trump's worsening trade war will damage the global economy. Beijing allowed its yuan to fall past the politically sensitive level of seven to the dollar on Monday following Trump's threat last week to extend punitive tariffs to an additional $300 billion of Chinese imports. Also, the Ministry of Commerce announced it was suspending promised purchases of American farm products.

On Tuesday, the yuan fell further to 7.052 to the dollar in early trading. That came after the U.S. Treasury Department officially labeled Beijing a currency manipulator, a status that opens the way to possible additional sanctions.

The escalating dispute between the world's largest economies is rattling investors unnerved about a global economy that was already slowing.

Shares of mining and energy sectors declined. Mining major BHP Group declined as much as 3.1%, while Fortescue Metals Group lost 7.1%. Oil and gas company Santos fell to its lowest level in over five months, while bigger rival Woodside Petroleum hit an over seven-month low.

Heavyweight financial stocks also weakened, with the big four banks down as much as 2.5%-3.4%. Tech stocks were also down, with data solutions provider Appen down as much as 3.4%.

ECONOMIC NEWS: Australia trade surplus bulges to record high in June-- Australia's trade surplus increased to a record high $8.03 billion in June from an upwardly revised $6.17 billion in May, boosted by iron ore shipments as the price of the metal hit five-year highs. Exports were up 1.4% for the month while imports were down 3.6%, the Australian Bureau of Statistics said on Tuesday.

RBA holds rates at 1% -- The Reserve Bank of Australia on Tuesday after two successive interest rate cuts in the previous months decided to hold its cash rate intact at the historic low of 1%. The RBA also has cut its GDP growth forecast to 2.5% for this year, but still expects the economy pick up a bit in 2020.

CURRENCY NEWS: The Australian dollar, a liquid proxy for emerging market and China risk, slipped against greenback on Tuesday. The Australian dollar changed hands at $0.6789 after touching an earlier low of $0.6748.

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