Australia Stocks mostly slip, China tariff deadline in focus

The Australian share market declined for the first time in four consecutive sessions on Tuesday, 10 December 2019, as investors elected to book recent profit on tracking negative lead from Wall Street overnight and amid concerns over prospect of a limited trade agreement between the U.S. and China, with less than a week to go before Washington is set to impose even more tariffs on Chinese goods. However, gains in iron ore miners helped limit losses on the bourse. Around late afternoon, the benchmark S&P/ASX200 index declined by 23.63 points, or 0.35%, to 6,706.40, while the broader All Ordinaries was down 23.26 points, or 0.34%, to 6,813.10.

Investors remained cautious amid uncertainties surrounding an initial trade deal between the United States and China. Both sides have less than 5 days to go before Washington is poised to impose even more tariffs on Chinese goods. Tariffs on another $156 billion in Chinese goods are set to go into effect on Dec. 15.

White House economic adviser Larry Kudlow said Friday the two sides are haggling over the amount of American farm products Beijing is willing to purchase. Data showed China's exports fell 1.1% in November, with those to the U.S. tumbling 23%.

The market broadly believes the United States will delay or cancel the tariffs but lingering uncertainty over that outcome could keep stock buying in check. The U.S. and China 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.

Traders awaited monetary-policy updates from the Federal Reserve, starting on Tuesday, and from new European Central Bank on Thursday, with investors hoping to gather clues on the state of the global economy and the longer-term outlook for interest rates.

Shares of banks and financials declined. National Bank (NAB) was the worst with a fall of 1.5% on a broker target price cut. Commonwealth Bank of Australia slipped 0.3%, and Australia and New Zealand Banking Group was down 0.7%. Bank of Queensland (BOQ) fell 1% as the bank holds an Annual General Meeting (AGM). BOQ expects FY20 to be a difficult year with lower cash earnings expected

Materials shares advanced after a 5.5% surge in the price of iron ore overnight on demand optimism fuelled by potential stimulus out of China. The three larger iron miners, BHP Group (BHP), Rio Tinto (RIO) and Fortescue Metals (FMG) were between 0.5% and 1% higher.

Logistics software firm, Wisetech Global (WTC) was down 0.3% after acquiring a South Korean customs solutions firm called Ready Korea for $13.2 million upfront with a potential additional $7 million based on performance.

Wealth manager IOOF Holdings shares rose 6% after Australia's banking regulator on Monday said it would allow wealth manager IOOF Holdings to hold controlling stakes in superannuation licenses currently owned by ANZ.

ECONOMIC NEWS: The ANZ-Roy Morgan Australian Consumer Confidence index rose 0.8% from the previous week, with respondents' positive views of the economy over the next 12 months gaining 3.9% - rebuilding after the prior week's 4.1% slump to a four-year low - and sentiment about the next five years gaining 2.7%.

CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, declined against greenback. The Australian dollar changed hands at $0.6825 after seeing highs above $0.684 in the previous trading week.

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