ASX closes lower in wake of US-China trade tensions
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The news: The Australian sharemarket posted broad losses as escalating trade tensions between the US and China weighed on investors’ minds. Gold and rare earth producers rallied.
The benchmark ASX 200 fell 0.84% to end at 8,882.8 with 10 out of the 11 sectors finished in the red.
At the end of last week, trade tensions between the US and China escalated as President Donald Trump threatened to impose an additional 100% tariff on Chinese imports in response to fresh export restrictions on products that contain even trace amounts of Chinese-origin rare earths as well as related technologies.
The tech sector (-2%) led losses, tracking US tech stock losses in the previous session. The sector was led down by Wisetech Global (-2.5%), Xero (-1.5%), Technology One (-1.8%) and NextDC (-2.2%).
Gold miners rallied as the spot price of gold set a new record during the day. Regis Resources (7.2%) led gains on the ASX 200. Bellevue Gold (+5.1%) and Catalyst Metals (+5.1%) also posted gains alongside rare earth producers Lynas Rare Earths (+2.7%) and Iluka Resources (+2.8%).
Biggest movers:
- Treasury Wines (-15%) – Withdrew its full-year earnings guidance amid uncertainty in China and California.
- Droneshield (-5.2%) – Drone detection and tracking system DroneSentry has passed a national security assessment by the UK government’s National Protective Security Authority.
- Tuas (-4.6%) – Its takeover target M1 was hit with legal proceedings brought by Liberty Wireless, who is in the midst of acquiring mobile virtual network operator services from M1.
- ANZ (+3.3%) – Released its strategy for the next five years, which includes a commitment to deliver its delayed new banking platform ANZ Plus. The bank also cancelled its $800 million buyback.
Other news:
- Fletcher Building (-1.7%) – Saw further declines in trading volumes and ongoing pressure on margins during the first quarter, amid continued weak demand across its key markets and heightened competitive activity, particularly in New Zealand.
- Catapult Sport – Announced plans to acquire German soccer scouting analytics platform IMPECT for a total consideration of EUR78 million ($139.6 million). Catapult also announced a $130 million fully underwritten equity placement and $20 million share purchase plan to help fund the transaction. Entered a trading halt on Monday morning.
What’s ahead:
- The Reserve Bank of Australia will release the minutes from its latest monetary policy meeting tomorrow at 11:30am AEDT.
- NAB will release the date from its business confidence survey for September tomorrow at 11:30am AEDT.
