ASX drops on global growth, trade concerns 16:15 AEST on Wednesday

Derek Rose

(Australian Associated Press)



The Australian share market has dipped amid pessimism about global growth prospects and concerns over US-China trade tensions.

The benchmark S&P/ASX200 index closed down 44.8 points, or 0.68 per cent, to 6,440 points at 1615 AEST on Wednesday, while the broader All Ordinaries was down 43.8 points, or 0.67 per cent, to 6,536.6.

“A bit of weakness, the market’s once again focusing on (Donald) Trump’s comments while he was visiting Japan,” said Bell Direct equities analyst Julia Lee.

The US president said on Monday he wasn’t ready to make a deal with China and US tariffs on the country could go up “very, very substantially, very easily”.

Every sector in the ASX was in the red except for telecommunications, which was flat.

Telstra gained 0.3 per cent to $3.57 after announcing it was making progress on its plans to cut costs by retiring some legacy platforms.

The telco giant said it was accelerating previously announced plans to eliminate 8,000 jobs from its payroll over three years, with 6,000 of those lay-offs now set to occur this financial year.

Industrials fell the most – 1.4 per cent – with Downer EDI falling 9.1 per cent to a three-month low of $7.16 after Credit Suisse downgraded the stock from neutral to underperform.

The downgrade came a day after Downer announced its partner in the Murra Warra wind farm near Horsham in western Victoria was having financial problems in Germany.

The mining sector was down 0.7 per cent, with heavyweight BHP down 0.6 per cent to $38.36 and Rio Tinto down 0.7 per cent to $104.53.

But rare earth miner Lynas Corp was the biggest gainer on the ASX, surging 16.32 per cent to a one-year high of $2.78.

With China threatening to use its dominance of the rare earth mineral trade as a bargaining chip in the trade war, Lynas suddenly finds itself well positioned.

Other smaller rare earth companies shot up as well, Ms Lee noted.

Rare earth metals and their alloys are important for everything from oil refineries to electronics and catalytic converters.

Greenland Minerals, which holds development rights to a rare earth deposit in Greenland, was up 18.18 per cent to 13 cents.

Alkane Resources, which has rights to a rare earth deposit in Dubbo, NSW, gained 12.28 per cent to 32 cents.

Arafura Resources, which has a proposed rare earth project north of Alice Springs in the Northern Territory, skyrocketed 22.86 per cent to 8.6 cents.

Among the big banks, Commonwealth dropped 0.2 per cent to $77.89 and Westpac fell 0.5 per cent to $27.74 while NAB gained one per cent to $26.40 and ANZ climbed 0.1 per cent to $28.04.

Bank of Queensland was up 0.8 per cent to $9.31 after it said chairman Roger Davis will step down from his position in October.

Mirvac was in a trading halt after the property group announced a $750 million placement to repay debt and said it was expecting to deliver at the top end of its earnings-per-share guidance.

Online lotto company Jumbo Interactive was up five per cent to $18.55 after no one hit the jackpot on Tuesday, meaning next week’s prize will rise to $40 million.

Agricultural company Nufarm was down 5.8 per cent to $4.05 after NSW imposed water restrictions amid a prolonged drought.

The Aussie dollar is buying 69.19 US cents, from 69.28 US cents on Tuesday.


* The benchmark S&P/ASX200 index was down 44.8 points, or 0.69 per cent, to 6,440 points at 1630 AEST on Wednesday.

* The All Ordinaries was down 43.8 points, or 0.67 per cent, to 6,536.6.

* At 1630 AEST, the SPI200 futures index was flat at 6,430.


One Australian dollar buys:

* 69.19 US cents, from 68.27 US cents on Tuesday

* 75.60 Japanese yen, from 75.82 yen

* 62.02 euro cents, from 61.94 cents

* 54.72 British pence, from 54.56 pence

* 105.90 NZ cents, from 105.63 cents


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