Australia

The Australian sharemarket is set to open lower today as US tech stocks suffer in the wake of Donald Trump's decision to beef up measures to bar Chinese firms from investing in American tech.

At 8.30am (AEST) the Australian futures index was down 11 points at 6127. The Australian dollar has fallen to 73.43 US cents, down from 73.75 US cents yesterday.

US stocks initially rose as Trump said he would use a strengthened national security review panel to deal with potential threats from Chinese acquisitions of US technology, instead of imposing China-specific restrictions.

The decision was seen by investors as a somewhat softer approach than plans reported earlier to block firms with at least 25 per cent Chinese ownership from buying US tech firms.

But later on Wednesday, White House economic adviser Larry Kudlow said Trump's announced plan did not indicate a softened stance on China.

Falls across the energy, resource and health care sectors pushed the Australian share market into the red on Tuesday, amid increasing investor fears of a global trade war.

The benchmark S&P/ASX200 index closed down yesterday 0.21 per cent, at 6197.6 while the broader All Ordinaries was down 0.26 per cent at 6292.1 points, following big falls on global markets overnight.

Out today: the ABS releases May jobs vacancies data.

Asia

Japan's Nikkei share average dropped on Wednesday after higher oil prices hurt rubber products makers, airlines and shippers, while companies' going ex-dividend added to the market's broader weakness.

Yet the market came off early lows which traders suspected was linked to Bank of Japan's buying of exchange-traded funds.

The benchmark Nikkei closed down 0.3 per cent at 22,271.77, while the broader Topix eked out tiny gains of 0.02 per cent to finish at 1731.45.

Hong Kong stocks slid to nearly a seven-month low as a sharp fall in the yuan added to worries about China's economic growth amid escalating US-China trade tensions.
The Hang Seng index fell 1.8 per cent, to 28,356.26, while the China Enterprises Index lost 2.2 per cent, to 10,879.17 points.

China stocks extended a bruising sell-off, with blue chips slumping to their worst loss in more than a year on growing concerns about the economic outlook amid a bitter trade dispute with the US and a faltering yuan.

Investors worried a depreciating yuan could trigger capital outflows in a blow to asset prices and push up costs for domestic airlines with dollar-denominated debts.

The blue-chip CSI300 index fell 2 per cent, to 3459.26 points, the lowest level since last May, while the Shanghai Composite Index plumbed a fresh two-year low before closing down 1.1 per cent at 2813.18 points.

Europe

The UK's top share index rebounded on Wednesday as fresh optimism regarding US trade policy fuelled risk appetite with the help of buoyant energy stocks.

The blue chip FTSE 100 index started the day in negative territory but closed up 1.1 per cent at 7621.69 points.

Tensions over trade between the US and China have hit stock markets this week, with the FTSE sliding more than 2 per cent on Monday.

Energy stocks added the most points to the index as crude prices climbed on supply disruption in Canada and after US officials told importers to stop buying Iranian crude from November.

Miners also lift the FTSE 100 higher with Rio Tinto and BHP up 2 per cent and 2.7 per cent, respectively.

Relief that the trading dispute between China and the US was on course to de-escalate pushed European shares higher on Wednesday after a start in negative territory.
The pan-European STOXX 600 closed 0.7 per cent higher, while the DAX gained 0.9 per cent.

North America

The S&P 500 technology sector fell 1.5 per cent, weighing the most on the broader S&P 500 index. Chipmakers, which derive much of their revenue from China, fell even more. The
Philadelphia semiconductor index slid 2.5 per cent.

Stocks were pressured further by a rise in the US dollar. A jump in oil prices to their highest in more than three years boosted the S&P 500 energy index 1.3 per cent, but some investors raised concern that they may have a negative effect on other sectors.

The Dow Jones Industrial Average fell 0.68 per cent, to 24,117.59, the S&P 500 lost 0.86 per cent, to 2699.63 and the Nasdaq Composite dropped 1.54 per cent, to 7445.09.

 

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Morningstar with AAP

Lex Hall is a Morningstar content editor, based in Sydney.

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