Australia Stocks falls 0.6%

Headline equities of the Australian market closed down on Friday, 24 May 2019, as risk aversion selloff continued amid deepening worries over trade tensions between the United States and China. Risk sentiments hurts after both the US and China have been making comments and taking actions which do not instill confidence that either party is closer to striking a trade deal. Most of sector heavyweights declined, with financials and resources being notable losers. At closing bell, the benchmark S&P/ASX200 index declined 35.79 points, or 0.56%, at 6,456 points, while the broader All Ordinaries was down 38.72 points, or 0.59%, at 6,545.80.

Washington last week effectively banned U.S. firms from doing business with Huawei, the world's largest networking gear maker, citing national security concerns. The U.S. Commerce Department said on Thursday it was proposing a new rule to impose anti-subsidy duties on products from countries that undervalue their currencies, in another move that could penalize Chinese products. China's Commerce Ministry hit back on Thursday, with its spokesman saying "if the United States wants to continue trade talks, they should show sincerity and correct their wrong actions."

 

Among individual stocks, Aristocrat Leisure gained after the poker machine game maker posting a better profit result which has triggered four broker price target upgrades today.

Estia Health declined as the aged care provider flagged lower profits, citing lower occupancy rates and bad publicity. The Aged Care Royal Commission kicked off in February.

CURRENCY NEWS: The Australian dollar declined against the U.S. dollar on Friday, possibly due to Westpac revising its forecast for RBA rate cuts in 2019 from 2 to 3. Westpac, one of the "Big 4" Australian banks, expects the Reserve Bank of Australia (RBA) to cut the cash rate to 0.75% by November. Earlier this week, the bank moved forward its forecast for rate cuts to June and August from the previous forecast of August and November made on Feb. 21. As of now, the markets are fully priced in for two rate cuts.

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