Australia Stocks fall deep in red

Headline indices of the Australian share market stumbled on last trading session of the week and of month, 30 November 2018, as investors elected to book profit on following the negative cues from Wall Street overnight amid renewed concerns about the outlook for interest rates and on caution ahead of the Group of 20 summits this weekend's in Argentina. Most of ASX issues declined, with shares in financial, realty, and consumer staples issues weighing the heaviest. In late afternoon trade, the benchmark S&P/ASX200 index tumbled 65.92 points, or 1.14%, to 5,692.50 points, while the broader All Ordinaries index fell 65.83 points, or 1.13%, to 5,769.90 points.

Risk sentiments in the local market dampened after the minutes of the Federal Reserve's monetary policy meeting held earlier this month seemed to reinforce expectations for another quarter-point increase in interest rates next month. The minutes said that almost all participants agreed another increase in rates was "likely to be warranted fairly soon."

 

Investors are looking ahead to the Group of 20 summit beginning Friday when President Donald Trump and Chinese President Xi Jinping are expected to meet and discuss trade issues. While outcomes from the meetings will be key they also remain completely unknown.

The summit will be watched closely for how relations between both countries develop, in addition to further news surrounding Sino-US trade. China's main goal at the G20 meeting is to get the United States to refrain from raising the tariffs in January. Trump is open to a deal with China but is ready to impose more tariffs if the upcoming talks don't yield progress.

As per reports, President Trump said he is very close to doing something with China, however markets remain unsure what that means and whether or not it will ultimately be in the form of a trade accord, an outline of an agreement, a step in the right direction or no deal at all.

Consumer staples was the worst performing sector, dragged down by a number of its heavy-hitters including Coca-Cola Amatil, which slid more than 11% after warning that 2019 will be another 'transitional year' for the company. The company said it has decided to sell its loss-making SPC business after a review of the Victorian food unit and expects the business to record a full-year loss in 2018 of about A$10 million. Coles continued its weak run since listing as a standalone business and was down 2.8%, rival supermarket chain Woolworths lost 1.8%, and Treasury Wine Estates fell nearly 4%.

Metals and mining stocks were mixed with BHP and Fortescue down 0.4 and 0.7% respectively, BlueScope flat, and Rio Tinto up 0.8%.

Financial stocks were lower. National Australia Bank, Westpac, Commonwealth Bank and ANZ Banking were down in a range of 1.2% to almost 1.6%.

Energy was the only sector to eke out gains following rebound in crude oil prices overnight. Santos and Woodside Petroleum were down 0.2% each, while Oil Search added almost 1%. Coal miner New Hope surged nearly four% higher.

CURRENCY: Australian Dollar, seen as a proxy for China-related trades, was virtually flat against greenback on Friday. The Australian dollar was quoted at $0.7317, compared to $0.7316 on Thursday.

OFFSHORE MARKET NEWS: Wall Street stocks closed slight lower on Thursday, as the minutes of the Federal Reserve's monetary policy meeting held earlier this month seemed to reinforce expectations for another quarter-point increase in interest rates next month. The minutes said that almost all participants agreed another increase in rates was "likely to be warranted fairly soon." The Dow Jones Industrial Average was down 27.59 points or 0.1% to 25,338.84. The broad-based S&P 500 index dipped 5.99 points or 0.2% to 2,737.80. The tech-rich Nasdaq Composite Index slipped 18.51 points or 0.3% to 7,273.08.

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