With the US trade war set to escalate further this week, the ASX remains in negative territory.
The S&P/ASX 200 slipped 53.6 points, or 0.63%, to 8,457.8 points as of 10.30am AEDT on Monday (10 February). The index has lost 0.87% for the last five days, and sits 1.27% below its 52-week high.
US President Donald Trump has announced 25% tariffs on US steel and aluminium imports on all countries, including Australia.
Wall Street closed lower last Friday (7 February) after a solid US labour market report pointed to a slow down in rate cuts by the US Federal Reserve.
Meanwhile, the ANZ says February data will be the first opportunity for preliminary insights into the impacts of US President Donald Trump’s early policy announcements.
Felix Ryan, an FX Analyst for ANZ Economics and Research, says consumers appear to have not responded well to tariff announcements.
“February preliminary University of Michigan consumer sentiment fell 3.3 points to 67.8, its lowest in 16 months as one-year inflation expectations spiked (4.3% vs 3.3%),” he says.
“The survey concluded on 4 February so it captured the Canada and Mexico tariff announcements.
“Stability in longer-run inflation expectations (3.3% vs 3.2%) therefore provides a better assessment of the inflation outlook, as the one year-ahead measure is influenced by consumers’ assessment of gasoline prices, which would have been pushed up by tariffs on Canadian oil imports.
“The evident volatility in the stock market and consumer sentiment highlight the perceived downside economic risks of such policies.”
This uncertainty also impacted the commodity sector, with demand for safehaven assets continuing to support gold, while copper recorded its biggest weekly gains since September on rising demand.
Eight of the 11 sectors of the S&P/ASX 200 index were in the red. The materials sector retreated 0.35%, industrials fell 0.28% and energy made a marginal 0.01% move backwards in early trade.
Champion Iron (ASX:CIA) escaped the broader market pull to climb 2.5% to $5.74 shortly after the opening bell.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Unsplash
