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Headline indices of the Australia market closed down on Tuesday, 18 September 2018, as risk aversion selloff triggered on an escalation in U.S.-China trade tensions after U.S. President Donald Trump imposed 10% tariffs on about $200 billion worth of Chinese imports, which will go up to 25% by the end of 2018. China has vowed to retaliate against any new tariffs imposed by the U.S. The benchmark S&P/ASX200 index closed down 23.5 points, or 0.38%, at 6,161.5 points, while the broader All Ordinaries index was 24.4 points, or 0.39%, lower at 6,269.5 points.
Shares of materials and resources tanked, with BHP Billiton was declining more than 1%, Rio Tinto was down 0.4% and Fortescue Metals fell 0.2%.
Shares of energy players closed down on profit booking following recent gains. Energy stocks rallied recently as speculators expected damage from Hurricane Florence in the United States to pipelines & higher demand for refined product. But reports showed that damage is not as bad as expected. Oil Search dropped more than 1%, Santos fell 0.7% and Woodside Petroleum was down 0.5%.
Shares in aged-care operators rebounded on bargain buying after a dramatic drop on Monday following Prime Minister Scott Morrison announcing a royal commission into the sector. Regis Healthcare was up 7%, Japara Healthcare was up 3%, and AVEO Group closed 3% higher. Estia Health finished at 7%.
TPG Telecom shares fell more than 1% after reported a nearly 5% fall in full-year profit after the national broadband network hit broadband margins and home phone revenue, while underlying earnings rose 0.7%.
ECONOMIC NEWS: The Bureau of Statistics reports showed that Australian home prices fell by 0.7% in the June quarter to stand 0.6% lower over the year – the first annual decline since June quarter 2012.
The weekly ANZ-Roy Morgan consumer confidence rating rose by 1.5% to 118.0 – the highest level in five weeks. The index is comfortably above the average of 114.1 held since 2014, and above the longer term average of 113.0 held since 1990.
The minutes from the September 4 Board meeting were issued. The Board's neutral policy stance remains intact with a period of record low interest rate stability ahead for the foreseeable future. The Reserve Bank Board noted that “since progress on unemployment and inflation was likely to be gradual, they [members] also agreed there was no strong case for a near-term adjustment in monetary policy…. members continued to agree that the next move in the cash rate would more likely be an increase than a decrease.”
CURRENCY: Australian Dollar declined against greenback and other major currencies on Tuesday, impacted by the anticipation of escalation in the trade tensions between the US and China. The Australian dollar was buying 72.13 US cents, compared to 71.60 on Monday; 80.98 Japanese yen, from 80.18; 61.62 euro cents, from 61.55; 54.82 British pence, from 54.71; 109.31 NZ cents, from 109.18.
OFFSHORE MARKET NEWS, US stock market closed down on Monday. The Dow Jones Industrial Average fell 92.55 points or 0.4% to 26,062.12, the Nasdaq plunged 114.25 points or 1.4% to 7,895.79 and the S&P 500 slid 16.18 points or 0.6% to 2,888.80.
The major European markets also closed down on Monday. The French CAC 40 Index and the German DAX Index edged down by 0.1% and 0.2%, respectively, while the U.K.'s FTSE 100 Index closed just below the unchanged line.
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