ASX 200 drops 195 points: tech stocks fall, while iron ore miners rise
As US-China trade tensions escalate, risk assets were sold off across the globe. Australian tech stocks were hit the hardest, iron ore miners fell before rebounding and gold stocks rallied.
US-China trade tensions have reached Australian markets in full-force today, as a savage sell-off saw the share prices of Australian tech stocks collapse.
The ASX 200 dropped as much as 195 points immediately following the market open, as Australian equities registered their worst day of 2019.
ASX 200 slides in early trade
Multiple factors drove the brutal sell-off of risk assets overnight and today, as concerns over US-China trade escalations mount.
Centrally, in response to Trump’s threat to slap tariffs on $300 billion worth of Chinese goods, China has taken a number of aggressive counter-measures.
Specifically, China has not only instructed its businesses to stop purchasing US agricultural products; but as IG’s Market Analyst, Kyle Rodda pointed out this morning, China has:
‘Set its daily onshore-Yuan fixing below 6.90 for the first time this year, sending the offshore-Yuan below the 7.00 mark for the first time ever.’
These counter measures, Mr Rodda further argued:
‘Could mark a dangerous turn for global financial markets, as matters of economic concern for China become subordinated to strategic, geopolitical priorities.’
Tech and iron ore miners crushed
As the ASX 200 opened this morning, this ‘dangerous turn’ was indeed realised.
Australian tech stocks were hit the hardest by these growing trade tensions. At their lowest, Afterpay Holdings Limited was down 6.3%, Altium Ltd dropped 6.7%, Xero Ltd was down 8.2% and both Wisetech Global Limited and Appen Limited fell 8.4%.
Mind you, it wasn’t just tech stocks impacted by today’s market chaos.
As the price of iron ore fell from $117 to $100 per tonne in the last week, Australian iron ore miners – which have already faced pressure in the last month – initially joined tech stocks in the losses this morning.
Although Rio Tinto, Fortescue Metals Group and BHP all witnessed hefty falls at the open, they rebounded in the afternoon session as positive trade surplus data was released.
As of 16:04 AEST, the ASX 200 was still down 157 points, or 2.37%.
Gold miners buck the trend
Gold stocks fared significantly better than the rest of the market, as investors rushed to the presumed safe-haven nature of the yellow metal, with both St Barbara Ltd and Northern Star Resources Ltd seeing strong gains during the day.
Spot Gold prices have now hit a six-month high of $1,457 per ounce.
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