SYDNEY, Australia – Australian stock market extended its losses from the previous trading day as it closes lower on Wednesday.
Investors worried over global trade following US President Donald Trump suggesting that there has been a delay in finalizing the agreement between the US and China.
Australian benchmark S&P/ASX 200 index marked its lowest level in a month as it traded 1.6% lower on Wednesday, closing around 6,606.5 points, an additional decline from its Tuesday loss of 2.2%.
The previous hopes for a partial agreement in the US-China trade discussions were squashed after Trump stated that phase one of the deal might get extended until after the 2020 election. Separately, Wilbur Ross, Commerce Secretary in the US, also confirmed that the additional tariffs on most Chinese imports that were expected to take effect on December 15 would follow as scheduled unless Washing and Beijing trade negotiations will have substantial progress.
According to an analyst from the RBC Capital Markets, the market has stayed trade-sensitive, and the lack of urgency in ending the trade war has been conferred as very real.
The downtrend on the market started on Monday following President Trump’s statement that he would restore the tariffs on steel and aluminum imports from Argentina and Brazil. It was a sign that the US and its trading partners will become a huge focus for the market going forward.
The heavyweight financial index has also marked a 1.7% decline, recording its lowest level since May 20 with the New Zealand and Australian Banking Group leading the losses for the “Big Four” lenders, with all of them finishing in the red zone.
All energy-related stocks have also gone down towards the negative territory, pushing the sector sub-index towards a 2% decline, closing to almost its two-week low.
Oil Search finished with a 1.4% decline while the gas and oil major Santos went down with a smashing 3% loss.
The breakdown of the trade negotiations has also sent the prices of copper and nickel much lower, bringing down shares for base metal miners Evolution Mining and Nickel Miners Ltd, which were the top losers in the mining sector.
On the other hand, the gold price has surged on Wednesday as it traded with 3% gains, which was mainly boosted by the higher demands for bullion prices and safe-haven bets. With the rise in gold prices, the Perseus Mining has marked a 7% increase on shares, while the Gold Road Resources recorded an 8% advance as the trading session closed for the day.