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Australian shares tumble on US uncertainty

Markets

Investor uncertainty about the US economy, President Donald Trump's controversial executive orders and lower oil prices have pushed the Australian share market lower.

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The benchmark S&P/ASX200 had fallen 1.18 per cent by 1200 AEDT, with major heavyweights mining, energy and financial companies the biggest losers.

Of Australia’s 20 biggest companies on the local bourse, all but QBE Insurance were trading in negative territory.

Wall Street closed fractionally lower for a second consecutive session on Friday in the wake of some disappointing US corporate earnings and gross domestic product data.

Locally, mining giants Rio Tinto and BHP Billiton dropped $1.07 to $66.78 and 50.5 cents to $27.01, respectively, despite iron ore and copper prices rising.

Fortescue Metals fell 9.5 cents to $6.53.

But gold miner Newcrest Mining fared better, up eight cents at $21.26 after reaffirming its annual production guidance depsite flat production in the December quarter.

Energy giant Woodside Petroleum fell 41 cents to $31.90, while Oil Search lost 10 cents to $6.90 on the back of lower oil prices following news that US oil drillers had increased the number of rigs.

Within the financial space, the Commonwealth Bank dropped $1.02 to $81.96, Westpac fell 41 cents to $31.94, ANZ lost 40 cents to $29.37 and National Australia Bank declined 38 cents to $30.30.

But, insurer QBE Insurance gained 16 cents to $12.49 amid takeover speculation, even though the company denies it is in talks with anyone.

Construction software firm Aconex’s profit warning led to a major sell-off, with the stock down $2.05, or 36 per cent, to $3.60.

And, Spotless shares fell 4.2 cents to 93.75 cents on news the cleaning and catering company faces a possible class action over its 2015 financial results.

Meanwhile, the Australian dollar is up against the greenback following a bumpy few days, after US President Donald Trump temporarily banned visitors from seven predominantly Muslim countries and barred Syrian refugees indefinitely.

The local currency was trading at 75.52 US cents at 1200 AEDT on Monday, from 75.26 cents on Friday.

Patersons Securities economist Tony Farnham said local shares had been pushed lower by a combination of global factors including lower oil prices and uncertainty about the US economy and President Trump’s executive orders.

“To some extent you’d attribute that to patchy US GDP on Friday,” he said.

“It’s (Trump’s actions) that are going to be a constant focus for markets, as well as the Trump twitter universe. That adds to volatility and it’s an ongoing story.”

– AAP

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