Australian shares joined in a regional sell-off as the latest drama out of Washington DC spooked global markets and sent traders out of equities and into safer assets such as gold.
Stocks fell sharply at the open after Wall Street sank in the overnight session in response to the sacking of US Secretary of State Rex Tillerson. The S&P/ASX 200 index ended Wednesday down 39 points, or 0.7 per cent, at 5935, while the broader All Ordinaries measure slipped 35 points to 6043.
Shares joined in a regional sell-off as the latest drama out of Washington DC upset investors.
Photo: Wayne Taylor
Selling in the major banks also weighted heavily on the market as day two at the banking royal commission produced more negative headlines for the sector. NAB dropped 1.2 per cent to $29.98 as evidence presented at the commission suggested shortcomings in the bank’s lending process. Elsewhere, CBA lost 0.6 per cent to $76.55, Westpac fell 0.9 per cent to $29.94 and ANZ declined 0.5 per cent to $28.34.
In response to news of Mr Tillerson’s sacking, investors flocked to perceived safehavens such as precious metals. Gold lifted lifted 0.8 per cent to fetch $US1327.90 an ounce in late Wednesday trade. Gold miners were the best performing names on the ASX, with the All Ordinaries Gold Index adding 0.3 per cent on a day where every major sector traded lower. A 1.1 per cent fall in heavyweight Newcrest Mining to $19.97 masked strong gains elsewhere in the industry: St Barbara jumped 5.6 per cent to $4.18, while Regis Resources climbed 2.9 per cent to $4.58.
“Market participants are seemingly anxious over what these high profile administrative changes could mean for future of US policies,” Citi analysts said. Mr Tillerson’s replacement is former CIA director Mike Pompeo and “concerns have risen over the Iran nuclear deal, which he has criticised in the past,” the analysts said.