The volatility in equities markets seems to have been tempered, at least for now, with global markets showing signs of stabilising.
However, ANZ Pacific Economist Kishti Sen says it may only be a temporary reprieve, as the US administration has opened an investigation into whether imports of pharmaceuticals and semiconductors create a national security risk, with 21-days for public comments.
“The fear is that the findings of the investigation may lead to new tariffs,” he says. “So far, both pharmaceuticals and semiconductors are exempt.”
Sen adds that progress on bilateral trade negotiation has been “painfully slow”.
“Trump called on China to ‘reach out’ to start negotiations but there is no sign that it will, and media reports suggest that the EU-US bilateral trade negotiations have not made any meaningful headway,” he notes.
The S&P/ASX200 started the session marginally lower, inching back just 0.4 points to 7,761.3 points as of 10:20am (AEST).
Over the last five days the index has gained 5.24%, but is down 4.88% year to date.
All 11 sectors are higher over the past week, with materials gaining the most on an 8.76% rebound. The financial sector has jumped 5.19% over the past five trading sessions, while energy has risen 4.49%, industrials is up 3.83% and utilities has advanced 2.3%.
Gold again found more upward momentum, rising above US$3,250 ($5,122) an ounce early on Wednesday (16 April) morning.
“The US Commerce Department said it had initiated probes into the national security impact of semiconductor and pharmaceutical imports. Support was also coming from buying in China, where gold-backed ETFs are finding favour,” Sen says.
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 & Stock
