Yahoo Finance ASX takes hit off the back of Trump trade rhetoric, impeachment calls
The Australian share market opened sharply lower today after Wall Street took its biggest daily dip this month.
The benchmark S&P/ASX200 index was down 44.1 points, or 0.65 per cent, while the broader All Ordinaries was down 46.2 points, or 0.67 per cent.
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The energy, mining and healthcare sectors fell over 1 per cent in the first 15 minutes of trade, with the big four banks also dropping around half a per cent.
What happened on Wall Street?
A push for the impeachment of US President Donald Trump gained momentum among Democrats in the US Congress after news broke that Trump enlisted the help of Ukrainian President Volodymyr Zelensky to investigate opponent Joe Biden.
That, combined with continuing consumer concerns over the economic impact of a prolonged US-China trade war amid Trump’s trade rhetoric at the UN, saw US stocks fall in volatile trade, giving the S&P 500 to takes its biggest daily drop in a month.
Stocks briefly pared back losses after Trump said in a tweet that his administration would release a complete transcript of a call with the Ukrainian President which would show the call was "totally appropriate”.
But his address to the UN General Assembly around trade was the real issue.
Trump told the Assembly he would not accept a “bad deal” in US-China trade negotiations just four days after negotiations held inconclusive talks in Washington.
Investment experts told AAP that Trump’s comments were “very antagonistic” towards China.
"It was the tone and the fact he listed out in great detail all the gripes the U.S. has with China," Chris Zaccarelli, chief investment officer at Independent Advisor Alliance said. "All that trade optimism that's been building has been sucked out of the air and replaced with pessimism."
"The rhetoric around China and President Trump's speech was as harsh as we have heard," a chief market strategist at brokerage National Securities Corp in New York said.
Will the ASX take a further dip as a result?
Chief economist at AMP Shane Oliver told Yahoo Finance that “it’s anyone’s guess”.
Oliver said the impeachment alone wouldn’t be cause for share markets to dip.
“The impeachment on their own, they haven't necessarily been bad for the share market,” Oliver said. “If you take when Bill Clinton was put through an impeachment trial back in the late 1990s, the US share market for most of the time actually went up.”
“What happened overnight was a combination of things,” Oliver said.
“It was the talk of the impeachment and the intensified political volatility that goes with that; there was the ongoing issues around the China trade war; and then you had some weak economic data in the US with consumer sentiment falling.”
“I think the risk is we could see some more weakness in the short term.”
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