Wall Street slips on 'trade war' concerns, Australian dollar surges closer to US81c
Updated
Negative sentiment in overseas stock trading is likely to flow to the Australian share market this morning.
Market snapshot at 8:30am (AEDT):
- ASX SPI 200 futures -0.3pc at 5,982, ASX 200 (Wednesday's close) +0.3pc at 6,055
AUD: 80.76 US cents, 56.81 British pence, 65.11 Euro cents, 88.17 Japanese yen, $NZ1.09 - US: Dow Jones +0.2pc at 26,252, S&P 500 -0.1pc at 2,838, Nasdaq -0.6pc at 7,415
- Europe: FTSE -1.1pc at 7,643, DAX -1.1pc at 13,415, Euro Stoxx 50 -0.6pc at 3,650
- Commodities: Brent crude +1.3pc at $US70.87/barrel, spot gold +1.3pc at $US1,357.81/ounce, iron ore +0.3pc at $US74.53/tonne
The biggest drop overnight was in Europe, with Frankfurt and London stock exchanges falling by more than 1 per cent.
Protectionism spooks investors
In a volatile session, Wall Street began its day at fresh records but sunk after protectionist comments made by a US official at the World Economic Form in Davos.
US commerce secretary Wilbur Ross called China's 2025 technology strategy a "direct threat" to the US — triggering a round of protectionist, fear-driven selling over increasing concern that America might enter a trade war with China.
He also said the US was investigating whether there's a case for taking action over China's alleged infringements of intellectual property.
Wall Street has since recovered slightly from those market-moving comments.
The S&P 500 fell slightly below its breakeven point, while the tech-heavy Nasdaq fell by 0.6 per cent.
As for the blue-chip Dow Jones index, it rose by 0.2 per cent.
Technology was the worst-performing S&P sector, falling by 0.8 per cent.
The biggest drops were experienced by Apple and Facebook — with their shares down by at least 1.5 per cent each.
Amazon and Google shares slipped by 0.4 per cent each.
Aussie dollar pushing US81c
The Australian dollar surged by more than 1 per cent overnight, but has since pulled back from it highs.
It reached as much as 80.83 US cents (at 2.30am AEDT).
This time, it was US treasury secretary Steven Mnuchin's comments which were the trigger — he "jawboned" the greenback by saying he "welcomed" a weaker US dollar.
"Obviously a weaker [US] dollar is good for us as it relates to trade and opportunities," Mr Mnuchin told reporters at the Davos forum.
This provided a fresh trigger to sell the US dollar, which has already been weakening for several weeks.
The US dollar index fell to a three-year low against several currencies, and boosted gold to its highest price in four months.
Gold has risen sharply to $US1,358.31 an ounce.
The Australian dollar slipped by 0.5 per cent against the British pound, after the United Kingdom released better-than-expected employment figures.
The number of people employed in the UK lifted by 102,000 during the September to November period — bringing those in employment to a record 32.2 million.
Topics: stockmarket, company-news, economic-trends, currency, australia
First posted
