Headline indices of the Australian stock market closed marginal higher in lackluster trade on Wednesday, 10 April 2019, as risk sentiments were downbeat on following soft lead from Wall Street overnight after the International Monetary Fund cut its global growth forecasts and as tensions over tariffs between the United States and Europe escalated. However, market losses were limited on hopes of a trade deal between Washington and Beijing and optimism that the Chinese economy may be bottoming out as policy support kicks in. At closing bell, the benchmark S&P/ASX200 index inclined 1.73 points, or 0.03%, at 6,223.54 points, while the broader All Ordinaries added 0.97 points, or 0.02%, at 6,316.46.
Market participants appetite for risk assets were subdued after the IMF cut its forecast for world economic growth this year, saying the global economy is slowing more than expected and that a sharp downturn could require world leaders to coordinate stimulus measures. The world economy will grow 3.3% this year, down from the 3.5% the IMF had forecast for 2019 in January, the fund said Tuesday in its latest World Economic Outlook. The 2019 growth rate would be the weakest since 2009, when the world economy shrank. It's the third time the IMF has downgraded its outlook in six months. The global volume of trade in goods and services will increase 3.4% this year, weaker than the 3.8% gain in 2018 but reduced from the IMF's January estimate of 4%, the fund's report showed.
The IMF cut its forecast for U. S. growth to 2.3% this year, down 0.2%age point since the IMF's last global outlook in January. The downgrade reflects the impact of the partial government shutdown that ended in January, as well as lower-than-expected public spending. The IMF slashed its outlook for the euro area to 1.3% this year, down 0.3 point from three months ago.
The IMF cut its outlook for U. K. growth to 1.2% this year, down 0.3 point from three months ago. The IMF raised its forecast for Chinese growth by 0.1 point to 6.3% this year, while lowering its projection for growth in Japan by 0.1 point to 1%. The fund cut its outlook for India's growth this year to 7.3%, down from 7.5% in January.
U. S. data overnight added to the cautious mood, with job openings dropping to an 11-month low in February and raising doubts about the strength of U. S. labor market, which has so far been one of the few bright spots in the economy.
Global trade anxiety was another sore point for risk asset markets. U. S. President Donald Trump threatened to impose tariffs on $11 billion worth of European Union products, heightening tensions over a long-running transatlantic aircraft subsidy dispute. The move came as markets remain on edge as negotiators try to hammer out trade deals with China and neighbors Mexico and Canada.
Tech stocks were the biggest gainers, with Afterpay Touch up 1.5% to A$25.03, Computershare up 0.6% to A$17.52 and Xero up 0.8% to A$51.40
Shares of industrials, consumer staples and property trusts also saw gains. Crown Resorts fell 9.1% to A$12.77 after Wynn Resorts said it had scrapped its takeover bid for the James Packer-controlled company after it leaked.
Shares of materials lost ground, with BHP down 0.4% to A$39.89, South32 down 1.9% to A$3.70 and Fortescue Metals down 0.4% to A$8.17. Rio Tinto gained ground, however, moving up 0.3% to A$101.83.
Energy stocks were lower after oil prices edged lower overnight. Santos, Woodside Petroleum, Oil Search and Origin Energy were down between 0.43% and 1.1%.
Financials were higher, with all four of the big banks in the green, led by Commonwealth, up 0.7% to A$70.75. Westpac was up 0.2%, NAB up 0.2% and ANZ up 0.1%. .
CURRENCY: The Australian dollar was little changed against the U. S. dollar on Wednesday. The Australian dollar was quoted at 71.48 US cents, from 71.44 US cents on Tuesday.
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