Australian shares slipped on Tuesday on Huawei US crackdown
Australian shares fell on Tuesday after a US crackdown on telecom giant Huawei
Investors remain cautious that the crackdown could lead to an escalation in the US-China trade war.
Analysts say Australia is vulnerable to any trade war escalation between the world’s largest economies. Australia is a strong ally to the US and China, as China is the biggest market for Australia’s exports of minerals and commodities.
TheS&P/ ASX200 index fel 0.3% to 6,459.50, after the benchmark rose 1.7% on Monday.
It comes after the US added the Chinese telecom company to a trade blacklist last week. According to a Reuters report US tech major Alphabet Inc's Google had suspended certain businesses with the Chinese firm.
Technology stocks took a fall on Tuesday, dropping as much as 3.2% following on from US stocks. Afterpay Holdings Limited lost 4% while Altium fell 1.2%.
Meanwhile, energy stocks slipped 1.3%. Beach Energy shed 3.4% while sector heavyweight Woodside Petroleum lost 1.5%.
IG market analyst, Kyle Rodda said, ‘t’s becoming clearer now the US and Chinese technology firms are becoming the central focus, at least for now, in the trade-war. And it makes sense, if the trade-war is examined through the proper lens: this conflict is about the US protecting its international supremacy moving into the future.’
Financial stocks rose after the Australian Prudential Regulation Authority (APRA) proposed dropping requirements for banks to use a minimum 7% interest rate when assessing a borrower’s ability to service a loan.
New Zealand's benchmark S&P/NZX 50 index fell 12.24 points or 0.1% to 10,221.91.
Synlait Milk shed 1.4% while dairy giant a2 Milk Company lost 0.6%.
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