Australian shares slipped on Tuesday on Huawei US crackdown
Australian shares fell on Tuesday after a US crackdown on telecom giant Huawei
Investors remain cautious that the crackdown could lead to an escalation in the US-China trade war.
Analysts say Australia is vulnerable to any trade war escalation between the world’s largest economies. Australia is a strong ally to the US and China, as China is the biggest market for Australia’s exports of minerals and commodities.
TheS&P/ ASX200 index fel 0.3% to 6,459.50, after the benchmark rose 1.7% on Monday.
It comes after the US added the Chinese telecom company to a trade blacklist last week. According to a Reuters report US tech major Alphabet Inc's Google had suspended certain businesses with the Chinese firm.
Tech Stocks
Technology stocks took a fall on Tuesday, dropping as much as 3.2% following on from US stocks. APT-AU lost 4% while Altium fell 1.2%.
Meanwhile, energy stocks slipped 1.3%. Beach Energy shed 3.4% while sector heavyweight Woodside Petroleum lost 1.5%.
IG market analyst, Kyle Rodda said, ‘t’s becoming clearer now the US and Chinese technology firms are becoming the central focus, at least for now, in the trade-war. And it makes sense, if the trade-war is examined through the proper lens: this conflict is about the US protecting its international supremacy moving into the future.’
Financial stocks
Financial stocks rose after the Australian Prudential Regulation Authority (APRA) proposed dropping requirements for banks to use a minimum 7% interest rate when assessing a borrower’s ability to service a loan.
Top lender Commonwealth Bank of AustraliaCommonwealth Bank of Australia rose 0.6% while Westpac Banking Corp gained 1.8%.
New Zealand's benchmark S&P/NZX 50 index fell 12.24 points or 0.1% to 10,221.91.
Synlait Milk shed 1.4% while dairy giant a2 Milk Company lost 0.6%.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
