The Australian share market closed steep down on Monday, 06 May 2019, as risk aversion selloff triggered across the board on renewed worries over US-China trade war after US President Donald Trump dramatically increased pressure on China to reach a trade deal by announcing he will hike tariffs on $200 billion (A$285 billion) worth of Chinese goods this week and target hundreds of billions more soon. At the closing bell, the benchmark S&P/ASX200 index stumbled 52.07 points, or 0.82%, at 6,283.73 points, while the broader All Ordinaries dropped 57.35 points, or 0.89%, at 6,369.85.
The markets tumbled after Trump warned China not to take too hard a line on trade talks, tweeting that the US tariffs on China had helped the US economy and noting that they are scheduled to increase on Friday. President Trump this morning threatened to more than double tariffs on US$200bn in Chinese imports from 10% to 25%. This is ahead of scheduled talks between both nations this Wednesday and recent signs a trade deal was possible by Friday.
The shares of financials were lower. Commonwealth Bank, ANZ Banking and Westpac were lower in a range of 0.1% to 1.2%, while National Australia Bank was edged up 0.1%. Westpac (WBC) became the last of the big banks to post earnings. Cash profit fell by 22% to A$3,296 million for the six months to March 2019, mainly due to A$753 million in customer compensation payments and restructuring costs. Not including these one-offs, earnings fell by a more modest 5%.
WBC has decided to maintain its interim dividend of 94c/share.
Materials shares declined. BHP dropped 0.4% to A$36.80 and Fortescue Metals dropped 2.1% to A$7.15.