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Shares tumble as pressure mounts on Trump

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Published on: Thursday, May 18, 2017

The share market has fallen for a second straight day as political uncertainty around US President Donald Trump sours risk appetite.

The benchmark S&P/ASX200 index fell 0.8 per cent, which coupled with Wednesday's fall of 1.1 per cent has wiped about $30 billion from the market's value.

The Australian dollar is higher though, with better-than-expected jobs numbers for April taking it to a two week high of around 74.5 US cents.

Equity investors followed the lead of Wall Street, where the S&P 500 and Dow Jones Industrial Average posted their biggest one-day falls in eight months.

Those falls were triggered by concerns US President Donald Trump is facing an increasing risk of being impeached, due to a media report that he sought to interfere in an FBI investigation into Russia's influence on the 2016 election.

Since the close of trade on Wall Street, former FBI Director Robert Mueller has been appointed to lead the investigation, and President Trump has said he is confident it would clear him of any wrongdoing.

Banks led the losses on the local market, partly because Westpac traded ex-dividend, but also due to heavy selling of financial stocks on Wall Street, Patersons Securities economist Tony Farnham said.

"There's concern if Trump becomes a lame duck president that the regulatory reforms he was going to push through will get blocked," he said.

"That was quite a negative for financials."

Westpac dropped 3.1 per cent, National Australia Bank shed 0.9 per cent, ANZ fell 0.4 per cent and Commonwealth Bank was 0.2 per cent weaker, while Macquarie Group dropped 1.2 per cent.

Among the worst performers was Sirtex Medical, which plunged 28 per cent to $10.75 after a trial of its liver cancer treatment delivered disappointing results.

Building products supplier James Hardie fell 7.8 per cent to $19.90 despite a 13 per cent rise in its annual profit.

Fairfax Media was one of the few bright spots, gaining nearly seven per cent to $1.24 after a second US private equity firm made a bid for the media group.

ON THE ASX:

* The benchmark S&P/ASX200 dropped 47.7 points, or 0.82 per cent, to 5,738.3 points.

* The broader All Ordinaries index dropped 45.7 points, or 0.79 per cent, to 5,775.5 points.

* The June SPI200 futures contract was down 44 points, or 0.76 per cent, at 5,738 points.

* National turnover was 2.6 billion securities traded worth $7.7 billion.

CURRENCY SNAPSHOT AT 1700 AEST:

One Australian dollar buys:

* 74.47 US cents, from 74.22 on Wednesday

* 82.90 Japanese yen, from 83.40 yen

* 66.91 euro cents, from 66.84 euro cents

* 57.49 British pence, from 57.49 pence

* 107.51 New Zealand cents, from 107.42 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,255.10 per fine ounce, up $US11.80 from $US1,243.30 on Wednesday.

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 1.741pct, from 1.743pct on Tuesday.

* CGS 4.75 per cent April 2027, 2.498pct, from 2.529pct.

Sydney Futures Exchange prices:

* June 2017 3-year bond futures contract at 98.21 (implying a yield of 1.79pct), unchanged from Wednesday.

* June 2017 10-year bond futures contract at 97.47 (2.53pct), from 97.43 (2.57pct)

(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)


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