ASX drops to 8374 points at close after failed talks between US and China over tariffs
The Australian markets had a promising trading day until the last hour when news broke that China and the US had failed to negotiate on tariffs.
China’s retaliation at US tariffs have caused great upset to the Australian markets despite a promising trading day.
The benchmark ASX200 index dropped 5.4 points or to 8374 points at the close on Tuesday.
The broader All Ordinaries gained five points to finish on 8,633.40.
The ASX traded in the positive for most of Tuesday but once China and the US confirmed tariffs would be implemented after failed talks, the market responded quickly by landing in the red in the final hour.
China retaliation on the US came in the form of the country imposing tariffs up to 15 per cent on some US imports.
Donald Trump on the weekend announced the US would impose a 10 per cent tariff on Chinese imports, while China will enforce a 15 per cent tariff on US coal and LNG, and 10 per cent tariffs on crude oil, farm equipment and some autos, effective February 10.
Market analyst Tony Sycamore said the ASX had fared well throughout the day as it was confirmed a 30-day pause was in place on tariffs imposed between the US, Mexico and Canada.
“The ASX200 has steadied today after US President Trump agreed to postpone tariffs on Mexico and Canada for a month after both countries agreed to reinforce their boarders to help curb the flow of illegal drugs,’ Mr Sycamore said.
CommSec Laura Besarati market analyst said the tariffs between China and US left investors worried.
“(Tuesday was a) better day than the one we had yesterday when we had 1.8 per cent tumble where we had our worst day in months,” Ms Besarati said.
“Just as the market was shutting today, we had breaking news … that could be the beginning of a trade war, something investors have been worried about.
“We were already fading in afternoon trade but we did see a big sell off right on the close when that news dropped from being up a third of 1 per cent to ending the day at 5 points lower to 8,374 points.
“All of the other sectors retreated.
“Energy sectors got dragged by lower oil prices after Trump agreed on to hold off on those tariffs, given these two countries are the biggest foreign oil suppliers to the US.”
The bottom performing stocks in this index were Audinate Group and Lynas Rare Earths, down 4.51 per cent and 3.81 per cent respectively
The medical sector fared well however, with Nufarm up 3.37 per cent and Appen 9.77 per cent.
Pro Medicus hit a record high of 5.18 per cent after signing a seven-year contract of $53m.
The Australian dollar fell 0.67 per cent to 61.84 US cents at the close.
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