The Australian share market is set to open almost one per cent lower after Wall Street again tumbles and after President Donald Trump announces tariffs on steel and imported aluminum.
At 0700 AEDT on Friday, the share price futures index was down 48 points, or 0.88 per cent, at 5,914.
No major economic or equities news is expected on Friday,
The Australian market on Thursday fell for a second straight day as Wall Street tumbled and several influential stocks traded without the right to their latest dividends.
The benchmark S&P/ASX200 index shed 42.7 points, or 0.71 per cent, to 5,973.3 points, while the broader All Ordinaries index fell 41.6 points, or 0.68 per cent, to 6,075.7 points.
US stocks have fallen sharply after President Donald Trump said the United States would impose import tariffs on steel and aluminium, adding fears of a tit-for-tat trade war to growing worries about higher interest rates.
After a confused day of report and counter report, Trump said the US would impose tariffs of 25 per cent on steel imports and 10 per cent on imported aluminium next week.
That drove shares in US steel producers as much as 12 per cent higher but knocked two per cent or more off heavyweights like Boeing and Caterpillar, who investors worried would face higher raw material costs and trade barriers elsewhere.
New York Federal Reserve president William Dudley also added to the evidence that the US central bank under new chief Jerome Powell would seek to tighten monetary policy with four interest rates rises this year, more than previously expected.
Gold prices settled at their lowest levels of the year, after recording the first monthly loss since October, weighed down as the U.S. dollar’s benchmark index held ground at six-week highs.
IRON ORE: $77.32 +0.17(April contract)
Oil prices edged lower, extending losses after data showed a weekly rise in U.S. crude supplies and production, along with an unexpected climb in gasoline stockpiles.
The dollar rose to its highest level in more than a month intraday, lifted by strong U.S. manufacturing data.
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.1% at 84.27, its highest level since Jan. 22.
A key measure of manufacturing activity tracked by the Institute for Supply Management rose to its highest level since 2004 in February, signaling an accelerating economy and bolstering the case for the Federal Reserve to raise rates at a faster pace this year.
Expectations of higher rates tend to attract yield-seeking investors and buoy the dollar.
The Australian dollar has rebounded to take some of the ground lost against its US counterpart since the new Federal Reserve chairman Jerome Powell signalled there could be more US interest rate rises than was originally anticipated by markets.
At 0635 AEDT on Friday, the Australian dollar was worth 77.42 US cents, up from 77.25 US cents on Thursday.
European shares slid on Thursday as a flurry of uninspiring earnings updates from retailer Carrefour and advertiser WPP kept the mood downbeat, while broader jitters over tightening monetary policy spilled over into a new month.
The pan-European STOXX 600 index fell 1.4 per cent to a two-week low, while Germany’s DAX fell 1.97 per cent to 12,190.94 and Britain’s FTSE felt the weight of Brexit uncertainty with a 0.78 per cent loss to 7,175.64.
Results were squarely in focus, with shares in French supermarket Carrefour dropping six per cent after the group cut its dividend and gave a cautious 2018 profit outlook.
Many retailers have struggled in the face of Amazon’s rise and the need to adapt to a tech-led world.
UK shares fell on Thursday after advertising giant WPP reported its worst results since the financial crisis and a gauge of British factory activity fell to its weakest in eight months.
Asian stocks were mostly lower on Thursday after Wall Street marked its worst monthly performance in two years as hawkish-sounding comments from new Federal Reserve Chair Jerome Powell reverberated across the broader risk asset markets.
But China’s markets, including Hong Kong, bucked the trend, edging up after a private survey showed manufacturing sector growth picking up to a six-month high.
Shanghai Composite Index closed 0.44 per cent higher at 3,273.76 while the blue-chip CSI300 gained 0.63 per cent to 4,049.09.
Hong Kong lifted 0.65 percent to end at 31,044.25.
But Japan’s Nikkei 225 tumbled 1.56 per cent, ending the day at 21,724.47, following Wall Street’s sharply negative lead.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.91 per cent for its third day of losses.
The S&P/NZX 50 index fell 0.4 per cent, to 8,342.71.