ASX has fallen for a third day as market factors in Trump win in US
The ASX 200 fell by 0.8 per cent during Wednesday’s trading, as investors think through the implications of the second Trump presidency on Australia.
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The Australian sharemarket has fallen for the third day in a row, with traders becoming more pessimistic about the implications of potential tariffs under Donald Trump.
The benchmark ASX 200 index fell by 62.20 points, or 0.75 per cent, on Wednesday to finish the session at 8193.40 points.
The broader All Ordinaries fell by 64.30 points, or 0.76 per cent, to close at 8450 points.
The Australian dollar traded flat at 65.29 US cents.
Wednesday’s market falls were broad based with 10 of the 11 sectors falling, with only the utilities sector trading higher.
The weakness in the Australian markets followed much of the world with European stocks falling by as much as 2 per cent overnight, while the Japanese Nikkei 225 Index traded down 1.91 per cent.
AMP head of investment strategy and chief economist Shane Oliver said much of the weakness around the world followed market sentiment after last week’s US Presidential election, with markets initially jumping with the US, before rethinking what it could mean domestically.
“The old saying is the market shoots first and asks questions later, with the markets now starting to ask what the impact will be,” Mr Oliver said.
He said while President-elect Donald Trump’s policy of tax cuts and tariffs were likely to be good for US markets, they were less likely to be bullish for Australia’s domestic market.
All four of Australia’s major banks fell, with CBA down 0.63 cents or 0.42 per cent to $149.62 after releasing its quarterly results, which showed the bank made $2.5bn for the quarter, in line with market expectations.
Shares in ANZ fell the most, down 3.99 per cent to $31.27 as the company traded ex-dividend, while Westpac and NAB fell 0.75 and 1.29 per cent respectively.
Mr Oliver said the markets had pushed back the Reserve Bank finally cutting the cash rate to next August at the latest, which is bad for the banking sector as it will put further pressure on consumers to pay back their loans.
However, he said investors could be overly pessimistic as the wage data released on Wednesday reaffirmed his views of a rate cut in February.
“You could make an argument the lower wages data increased the prospect for the rate cut (from the RBA).
“The market seems to be ignoring that and trading more on the view that potential higher rates in the US could potentially mean higher interest rates in Australia.
“We’ve got wages growth of 0.8 per cent for the quarter, multiple by 4 and wages growth is 3.2 and that is not particularly threatening to inflation, if anything it means lower services inflation.”
Paladin Energy was the strongest performer on the ASX on Wednesday, with investors buying the dip, after the shares fell more than 20 per cent on its market update on Tuesday.
James Hardie shares were also up $3.11 or 6.19 per cent to $53.35 following a stronger than expected market update.
Magellan Financial Group shares crashed 4.80 per cent to $10.11 after the company announced COO and CFO Kirsten Morton is leaving the company.
In a statement to the ASX Magellan confirmed Ms Morton left in October and said they would let the market know when a replacement is found.
Originally published as ASX has fallen for a third day as market factors in Trump win in US
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