Roughly 1% drops for Australia’s big banks helped keep the country’s stock benchmark in the red for a third session, though it finished near some of the day’s better levels.
The S&P/ASX 200 fell 0.2% to 5920.80 even as the materials sector rose 0.6%. That was more than offset by declines in the Big 4 banks and a 0.8% drop in energy stocks on weakness away from the oil patch.
This current three-day slide follows a three-day winning streak; the index is up a net 0.3% during those six sessions.
U.S. stocks rose intraday, putting the Dow Jones Industrial Average and S&P 500 on track for their first day of gains in four sessions.
The indexes still showed signs of weakness, as stocks swung between small gains and losses earlier in the session.
The bull market is struggling to regain some of its momentum, as investors continued to assess the implications of the Trump administration’s protectionist trade agenda. President Donald Trump is now considering a package of anti-China measures, including tariffs on some imports, to pressure Beijing to end requirements that U.S. companies transfer technology to Chinese firms.
Gold prices fell, weighed down by a stronger dollar and worries about the impact of higher interest rates.
Front-month gold for March delivery fell 0.6% to $1,316.80 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices have stayed between roughly $1,305 and $1,360 this year, swinging in that range based on moves in the dollar and investors’ focus on interest rates.
A stronger dollar makes gold and other commodities denominated in the U.S. currency more expensive for overseas buyers. The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, was up 0.3%.
In other commodities, March wheat fell 10 cents to $4.78 3/4 a bushel.
Oil prices rose as investors weighed signs of growing global oil demand and surging U.S. shale production.
The U.S. dollar edged higher intraday, remaining within its recent trading range as investors assessed developments affecting international trade and diplomacy.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, rose 0.1% to 83.62. The dollar gained against the euro and the Canadian dollar while falling against the Japanese yen.
Analysts said investors are assessing the potential impact of U.S. tariffs on steel and aluminum and a political scandal in Japan. Rising tensions between the U.K. and its
Western allies with Russia over charges that Russia used a nerve agent on a former spy living in the U.K. also rattled investors.
The Australian dollar has hit a one-week low against a
strengthening US dollar after comments from Donald Trump’s new economic advisor Larry
Kudlow that the president favours a stronger US dollar.
At 06:35 AEDT on Friday, the local currency was worth 77.99 US cents, down from 78.68 US cents on Thursday.
Earlier on Friday morning, the Aussie dollar dropped as low as 77.96 US cents.
Westpac head of NZ strategy Imre Speizer said commodity currencies, such as the Australian dollar were the worst performers overnight.
European shares closed higher, with the Stoxx Europe 600 ending up 0.5% at 376.88, mirroring a rise in U.S. stocks as concerns about U.S. trade sanctions ease for now.
Falls in the euro against the dollar after solid U.S. data helped, with auto stocks among the main gainers, lifted also by earlier upbeat eurozone car registration data.
Volkswagen shares rose 2.4% and BMW by 0.8%, while Lufthansa rose 2.2% after results.
This helped German stocks outperform, with the DAX closing up 0.9%. France’s CAC 40 ended up 0.7%, while Italian stocks outperformed, with the FTSE MIB up 1.2%.
Spain and the U.K. underperformed, with the IBEX 35 down 0.04% and the FTSE 100 up 0.1%. Swiss airport retailer Dufry AG led Stoxx Europe 600 decliners, declining 6.6% after giving no details about a planned resumption of regular dividend payments.
Stocks in several Asia-Pacific markets came back from early declines as interest in cheap buying opportunities started to push back concerns over trade protectionism.
Stock indexes in Japan and Hong Kong initially dropped by more than 1% following falls in major U.S. benchmarks overnight, but as investors perceived overselling they stepped in and pushed the Nikkei and the Hang Seng back into positive territory. However, shares in mainland China continued to fall.
The initial pessimism stemmed largely from a third straight fall in major industrial stocks in the U.S. on concerns over the implications of protectionist trade policies. The U.S. Commerce Department said Wednesday that U.S. businesses seeking to avoid tariffs on
supplies they import will face high hurdles. A puzzling decline in U.S. retail sales, meanwhile, hit stocks in that sector.
The Nikkei’s push back into positive territory was helped by the yen’s retreat off session highs. The benchmark finished up 0.1% as the dollar strengthened to Y106.08 from a low of around Y105.77.
Stocks of large Chinese firms trading in Hong Kong logged gains, with Tencent up 0.5%, pushing this week’s increase well above 4%. Ping An, another common bet of mainland investors looking south, was up 2.4%.