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Shares hit by soft GDP and tariff concerns

Christian Edwards
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The Australian stock exchange is tipped to open steady as the mood on financial markets improves.

The Australian stock exchange is tipped to open steady as the mood on financial markets improves.

The Australian share market has fallen sharply as uncertainty remains about the implications of US steel and aluminium tariffs.

The benchmark S&P/ASX200 index dropped one per cent to 5,902 points, which follows a rise of 1.1 per cent on Tuesday.

Phillip Capital senior client adviser Michael Heffernan said safe haven gold stocks were among the few winners as uncertainty dominated markets around the world.

Japan's Nikkei 225 was down 0.8 per cent and Hong Kong's Hang Seng Index was down 0.7 per cent, as US stock market futures pointed to falls when trade resumes on Wall Street.

Mr Heffernan said concerns about White House economic adviser Gary Cohn's resignation after a debate about President Trump's tariff proposal were overcooked.

"All this uncertainty will simply evaporate when President Trump signs the piece of paper that makes these law," Mr Heffernan said.

Australia's big miners continue to be impacted by the retreating price of iron ore as the US tariffs threaten to dent global demand for steel.

BHP Billiton and Rio Tinto each dropped one per cent and Fortescue Metals was 1.9 per cent weaker.

Gold miner Newcrest gained 1.8 per cent and Evolution Mining added 1.4 per cent.

Among the major banks, Westpac was the worst performer, losing 1.6 per cent.

Energy producers were not lifted by a small rise in global oil prices, with Santos down 2.6 per cent, Oil Search down 1.4 per cent and Woodside Petroleum 0.7 per cent weaker.

The market gained ground after the release of December quarter economic growth figures at 1130 AEDT, but fell back again in the final two hours of the session.

GDP growth slowed to 0.4 per cent in the final three months of 2017, for an annual rate of 2.4 per cent, slightly below market expectations.

The Australian dollar gained almost a quarter of a US cent in the hour after the release of the data, and held onto those gains.


* The benchmark S&P/ASX200 index was down 60.4 points, or 1.01 per cent, at 5,902.0 points

* The broader All Ordinaries index was down 56.1 points, or 0.93 per cent, at 6,005.4 points

* The SPI200 futures contract was down 54 points, or 0.91 per cent, at 5,900 points

* National turnover was 3.4 billion securities traded worth $6.2 billion


One Australian dollar buys:

* 78.01 US cents, from 77.74 US on Tuesday

* 82.43 Japanese yen, from 82.57 yen

* 62.82 euro cents, from 62.95 euro cents

* 56.20 British pence, from 56.15 pence

* 107.06 NZ cents, from 107.34 NZ cents


The spot price of gold in Sydney at 1700 AEDT was $US1,332.46 per fine ounce, from $US1,322.95 per fine ounce on Tuesday.


* CGS 4.50 per cent April 2020, 1.9881pct, from 2.0103pct on Tuesday

* CGS 4.75pct April 2027, 2.7391pct, from 2.7624pct

Sydney Futures Exchange prices:

* March 2018 10-year bond futures contract at 97.22 (implying a yield of 2.78pct), from 97.195 (2.805pct) on Tuesday

* March 2018 three-year bond futures contract at 97.9 (2.1pct), from 97.88 (2.12pct).

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