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Shares up as trade war threat diminishes

Trevor Chappell
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The Australian share market is only a touch higher at the open after US stocks closed higher.

The Australian share market is only a touch higher at the open after US stocks closed higher.

The Australian share market has closed higher as investors saw less of a chance of a global trade war after US President Donald Trump exempted Canada and Mexico from US steel and aluminium tariffs and suggested other allies, such as Australia, could also be exempt.

The benchmark S&P/ASX200 index was up 20.3 points, or 0.34 per cent at 5,963.2 points at 1630 AEDT on Friday, with gains across all sectors except for mining and energy.

President Trump has pushed forward with the imposition of the tariffs on imported steel and aluminium but has announced exemptions for neighbours Canada and Mexico and said exceptions could also be made for allies such as Australia.

Phillip Capital senior client adviser Michael Heffernan said the Australian share market had reacted well to Mr Trump's less-hardline stance.

"Certainly the market believes there won't be a trade war, so it's saying we'll move on," Mr Heffernan said.

Mr Heffernan said that President Trump's surprise agreement to meet North Korean leader Kim Jong-un, who has said he will suspend North Korea's testing of nuclear weapons, may also have helped boost sentiment.

"Clearly, the man (President Trump) has thrown down his trump card again and has varied it (the tariffs position) slightly, which went down alright," Mr Heffernan said.

"And it also looks like everything is all rosy in the garden in North Korea again, so that always helps the market."

Mr Heffernan said Investors are now awaiting the release of key US jobs figures very early on Saturday morning local time, which are hoped to shed more light on the pace of US Federal Reserve interest rate moves.

On the local bourse, among the big banks, Commonwealth Bank rose 0.9 per cent to $76.8, ANZ climbed 0.3 per cent to $28.43, Westpac added 0.3 per cent to $30.09, and National Australia Bank gained 0.7 per cent to $30.29.

The major miners retreated in the wake of lower iron ore prices.

BHP Billiton fell 1.7 per cent to $28.32, Rio Tinto lost 2.6 per cent to $73.80, and Fortescue Metals reversed 1.4 per cent to $4.75.

Copper miner Oz Minerals dropped 34 cents, or 3.5 per cent, to $9.33 after floating possible renewable energy investments in a bid to combat climbing electricity prices.

Myer descended two cents, or 4.4 per cent, to 43.5 cents after the ASX announced that the department store operator will drop out of the S&P/ASX200 index following a decline in the company's market value.

Meanwhile the Australian dollar is weaker against the US dollar as global commodity prices continue to ease.

At 1630 AEDT, the local currency was worth 77.93 US cents, down from 78.26 US cents on Thursday.


* The benchmark S&P/ASX200 was up 20.3 points, or 0.34 per cent, at 5,963.2 points

* The broader All Ordinaries index was up 22.5 points, or 0.37 per cent, at 6,069.1 points

* The SPI200 futures contract was up 24 points, or 0.4 per cent, at 5,963 points

* National turnover was 2.2 billion securities traded worth $4.8 billion


One Australian dollar buys:

* 77.95 US cents, from 78.26 on Thursday

* 83.13 Japanese yen, from 82.94 yen

* 63.3 euro cents, from 63.09 euro cents

* 56.46 British pence, from 56.31 pence

* 107.15 NZ cents, from 107.40 cents


The spot price of gold in Sydney at 1700 AEDT was $US1,318.3 per fine ounce, from $US1,326.86 per fine ounce on Thursday.


* CGS 4.50 per cent April 2020, 2.0038pct, from 1.9914pct on Thursday

* CGS 4.75pct April 2027, 2.7351pct, from 2.7488pct

Sydney Futures Exchange prices:

* March 2018 10-year bond futures contract at 97.228 (implying a yield of 2.772pct), from 97.210 (2.790pct) on Thursday

* March 2018 3-year bond futures contract at 97.88 (2.12pct), from 97.895 (2.105pct).

(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)