Staff reporters
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Australia’s share market was in the red on Wednesday after Wall Street sank in its first session after US President Donald Trump’s first meeting in office as tensions rose over his efforts to assert US control over Greenland.
The S&P/ASX 200 was down 25.4 points, or 0.3 per cent, after midday, with eight of 11 industry sectors losing ground.
Gold miners jumped after the safe haven asset price jumped overnight as global markets grew jitters, with North Star up 2.3 percent and Evolution mining up 3 percent. Iron ore heavyweights are strong, with Fortescue up 0.6% and BHP up 0.8%. Rio Tinto was up 2.4 percent as it reported a 7 percent rise in shipments of key steel-making material iron ore in Western Australia’s Pilbara in the December quarter, while it launched its long-awaited Samandu iron ore joint venture in the West African country of Guyana.
The Big Four banks lost ground, with Commonwealth Bank (down 1.7 per cent), Westpac (down 0.8 per cent), ANZ Bank (down 1.4 per cent) and National Australia Bank (down 1 per cent) sharply lower in afternoon trade.
Local technology stocks retreated after Wall Street’s Nasdaq dove, with Voice Tech and Technology Inc down 2.7 percent and Zero down 4.1 percent.
On Wall Street, losses were widespread, with declines in nearly every sector. Major U.S. indexes have extended losses since last week to start the year.
The S&P 500 fell 143.15 points, or 2.1 percent, to 6,796.86. This is the sharpest drop for the benchmark index since October. The Dow Jones fell 526 points, or 1.1 percent.
The Nasdaq Composite fell 1.5 percent.
Technology stocks were the top market heavyweights. Nvidia, one of the world’s most valuable companies, fell 4.4 percent. Apple fell 3.5 percent.
Retailers, banks and industrial companies also fell sharply. Lowe’s fell 3.3 percent, JPMorgan Chase lost 3.1 percent, and Caterpillar fell 2.5 percent.
European markets and markets in Asia fell. Long-term bond yields in Japan hit record highs on concerns over the government’s fiscal policy, adding to jitters in global markets.
Trump’s trade policies have decimated markets since the start of his second term. Stocks have sold off the threat of steep rates, then rallied if Trump delayed or canceled any tariffs or negotiated lower rates.
Trump said on Saturday that he would impose a 10 percent import tax on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, the Netherlands and Finland in February. The combined annual imports of EU countries are greater than the largest individual importers in the US, Mexico and China.
Gold prices rose 3.7 percent and silver prices rose 6.9 percent. Such assets are often considered safe havens in times of geopolitical turmoil.
Trade tensions apparently short-circuited the recent rally in Bitcoin. The cryptocurrency rose above $US96,000 late last week but has since fallen to around $US89,700.
Treasury yields were mixed in the bond market. The yield on the 10-year Treasury rose to 4.29 percent on Friday. The yield on the two-year Treasury was flat at 3.60 percent late Friday.
Companies that focus on consumer staples outperform most of the market. Colgate-Palamo is up 1.1 percent and Campbell’s is up 1.5 percent.
U.S. crude oil prices were up 1.5 percent at US$60.34 a barrel. Brent crude, the international benchmark, rose 1.5 percent to US$64.92.
Trump linked his aggressive stance on Greenland to last year’s decision not to award him the Nobel Peace Prize, telling Norway’s prime minister that he no longer felt an “obligation to think about peace at all” in a text message released Monday.
Trump’s message to Jonas Gahrster appeared to show a standoff between Washington and its closest allies over threats to annex Greenland, the self-governing territory of NATO member Denmark.
Trump’s threats have sparked outrage and diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first use of the EU’s anti-coercion tool.
Trade and political tensions with Europe are heating up as world leaders meet this week at the World Economic Forum’s annual meeting in Davos, Switzerland. Dan Ives, an analyst at Wedbush Securities, said the threat of new tariffs was “clearly an overshoot at the conference,” but it will likely simmer over time.
“Our view is that barking on this issue and threats of tariffs will only get worse as negotiations take place and tensions between Trump and EU leaders eventually calm,” Ives wrote in a note to clients.
The Fed, and Wall Street, will get another inflation update on Thursday, when the government releases the personal consumption expenditures price index, or PCE. This is the Fed’s preferred measure for inflation.
The Fed meets next week for its policy meeting on interest rates and Wall Street is betting that the central bank will keep its benchmark interest rate steady.
With AP
The Market Recovery Newsletter is a wrap-up of the day’s trades. Let’s get everyoneELate afternoon.
