Energy, materials jump on Trump trade negotiations

Cautious Australian investors pushed the ASX slightly higher on Monday as they await news from negotiations on a US-China trade deal.

A rally in the major miners and energy stocks helped the ASX 200 eke out a tiny gain during Monday’s trading, as cautious investors eagerly await news of a trade deal between the US and China.

The benchmark ASX 200 index closed just up 2.3 points or 0.03 per cent to 8,233.50.

The broader All Ordinaries finished up 4.40 points or 0.05 per cent to 8,467.00.

The Australian dollar is up 0.47 per cent buying 64.48 US cents.

Energy and materials sectors jumped on the latest US – China announcement: ASX stock. Picture: NewsWire / Nikki Short

On a mixed day for sharemarkets five of the 11 sectors finished in the green, led by energy and material stocks, as investors factor in stronger economic growth from a US-China trade deal.

Investors were waiting for an announcement between the US and China on rolling back tariffs on each others imported goods, expected on Monday night.

Woodside continued its gains, up 1.96 per cent to $20.80 while Santos soared 3.30 per cent to $6.26.

The major iron ore miners also had a strong day on the back of strengthening price of the underlying commodity.

BHP jumped 2.29 per cent to $38.40, Rio Tinto climbed 2.06 per cent to $117.35 and Fortescue Metals closed Monday up 1.32 per cent to $16.17.

On the other hand, healthcare stocks continue to slump, down 1.42 per cent, with traders waiting to see if there will be any tariff fallout for pharmaceutical companies.

US President Donald Trump announced on Truth Social he plans to sign an executive order to drastically lower drug prices in the US, which would have a massive fallout for Australians.

“I will be signing one of the most consequential Executive Orders in our Country’s history. Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30 per cent to 80 per cent,” he wrote.

ASX heavyweight CSL slumped 1.74 per cent to $235.14, Cochlear Limited slid 0.65 per cent to $265.80 and Fisher Paykel fell 2.49 per cent to $32.53.

Financials continued to be a drag on the market, after three of the big four banks announced their half yearly results last week, showing increased pressures on the all important net interest margin.

Westpac lost 0.42 per cent to $31.08 and NAB slumped 2.30 per cent to $35.69. While Commonwealth Bank moved up 0.084 per cent to $167.18 while ANZ jumped at the close up 0.79 per cent to $29.21.

Five of the 11 sectors finished in the green. Photo: Gaye Gerard / NewsWire

While Australia’s response to the US-China trade talks were subdued, futures markets in the US soared, with the Nasdaq jumping more than 2 per cent, on expectations of a tariff negotiation deal between Washington and Beijing in Geneva.

US trade representative Jamieson Greer told journalists on Sunday the differences between the two largest nations are “not as large as maybe thought”, while China also predicts a “sustainable development” has been achieved.

IG market analyst said US futures have gone “crazy” on the reopening, despite President Trump, simply undoing the damage he previously put on the market.

“Even if we see an announcement that tariffs today have been lowered and the US and China will keep talking to reduce them further, the tariff rate on US imports will still be somewhere between 15 to 20 per cent,” he said.

“That is up from around 3 per cent prior to the Trump administration winning the election.

“So we’re talking about a massive increase on tariffs and a big hit to US spending with the capacity for consumption being reduced due to the tax of that magnitude.”

In company news Mineral Resources soared 8.3 per cent to $22.81, despite Hesta Superannuation fund selling out of the mining giant.

Originally published as Energy, materials jump on Trump trade negotiations