ASX hits a five-month low as fears of a trade war continue to overshadow global markets

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Almost every sector has seen negative territory today as worries of a potential trade war between the US and China continue to weigh down global markets. Australian shares didn’t escape the downward slide, having fallen back to levels not seen since mid-October.

The benchmark S&P/ASX200 index was down 0.52 per cent, at 5,790.5 points at 1630 AEDT, with retreating stocks led by the major banks.

Bell Direct equities analyst Julia Lee said that losses stabilised through the day.

“We are seeing some green shoots of a bounce, US futures are trading higher and around the region Korea (up 0.5 per cent) is actually on positive trading ground,” Ms Lee said.

“The market is hoping (US President) Donald Trump’s talk on China tariffs is a negotiating technique rather than a signal of an all-out trade war and, given that China is the largest holder of US treasuries, they both have quite a bit to lose,” Ms Lee said.

Ms Lee said that over the next two-week trade negotiation period the market would be choppy and likely move around on headlines.

Australia’s big four banks were out front of losses on Monday, with the Commonwealth Bank of Australia (ASX:CBA) shedding 1.1 per cent to $72.02 after losing three key executives ahead of incoming CEO Matt Comyn’s arrival on April 9. Australia and New Zealand Banking Group (ASX:ANZ) dropped 0.7 per cent to $27.52, National Australia Bank Ltd. (ASX:NAB) dropped 0.7 per cent to $28.78 and Westpac Banking Corp (ASX:WBC) fell 0.6 per cent to $28.67.

Bendigo and Adelaide Bank Ltd (ASX:BEN) dipped 21 cents, or 2.1 per cent, to $9.94 on news long-term CEO Mike Hirst would retire in July, to be replaced by chief customer officer Marnie Baker, who will be the first female managing director in the bank’s 160-year history.

The top miners lost ground as Dalian iron ore futures fell, with BHP Billiton Limited (ASX:BHP) off 0.6 per cent at $28.60, Rio Tinto Limited (ASX:RIO) down 0.2 per cent to $73.32, and Fortescue Metals Group Limited (ASX:FMG) 0.9 per cent weaker at $4.61.

The price of gold and local gold miners rose as geopolitical tensions stoke demand for the safe haven metal, with Newcrest Mining Limited (ASX:NCM) ahead by 1.6 per cent to $20.17 and rival Northern Star Resources Ltd (ASX:NST) up 2.7 per cent to $6.96.

Oil prices reversed their earlier gains after the U.S. rig count hit a three-year high, pointing to rising output but leaving local producers mixed.

Woodside Petroleum Limited (ASX:WPL) fell in afternoon trade, down 0.1 per cent to $29.31, Santos Ltd (ASX:STO) lifted 0.8 per cent to $5.12, and Oil Search Limited (ASX:OSH) rose 0.7 per cent to $7.19.

In local company news, wealth manager AMP Limited (ASX:AMP) was 15 cents, or 2.9 per cent, lower at $5.07 after announcing chief executive Craig Meller will step down at the end of the year.

Harvey Norman Holdings Limited (ASX:HVN) shed one cent to $3.63 after the retailer announced its dairy investment, Coomboona Holdings, is in receivership.

And Australian Dairy Farms Group (ASX:AHF) gained 7.5 cents, or 68.2 per cent, to 18.5 cents after it announced plans to convert six Victorian dairy farms to produce organic infant formula for local and overseas markets.

Meanwhile, the US dollar is trading at a 16-month low against the Japanese yen, pressured by global trade war talk, as falls in commodity prices kept Australian dollar gains against the greenback to a minimum.

At 1630 AEDT, the local currency was worth 77.23 US cents, from 77.09 US cents on Friday.

ON THE ASX AT 1630 AEDT:

* The benchmark S&P/ASX200 was down 30.2 points, or 0.52 per cent, at 5,790.5 points

* The broader All Ordinaries index was down 27.6 points, or 0.47 per cent, at 5,901.4 points

By Christian Edwards, AAP 

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