Australia: Shares make modest gains after heavy selloff; NZ rises

Australia: Shares make modest gains after heavy selloff; NZ rises

Australia: Shares make modest gains after heavy selloff; NZ rises

USA stocks tumbled overnight, confirming a correction for the Nasdaq and erasing the Dow and S&P 500's gains for the year.

The S&P-ASX 200 index opened just 0.7 per cent higher despite index futures pointing to a 1.3 per cent gain, but selling soon knocked it to a 0.7 per cent loss.

The Russell 2000 index of smaller-company stocks gave up 57.89 points, or 3.8 per cent, to 1,468.70.

Assuming these themes have become exhausted, given the beneficiaries of this dynamic have predominantly been the highly weighted financial, mining (which, as an aside, could find its feet again if the bull market in iron ore continues) and healthcare stocks, it stands to reason that a wash out in the Australian equity market is due and the ASX200 still have scope to fall. Rio Tinto and BHP Billiton were lower in a range of 2% to 4%.

Japan's Nikkei.N225 tumbled 3.5 percent to a six-month trough while Australian shares hit a more than one-year low. Fortescue Metals fell nearly 4% as the company reported an 8.6% decline in iron-ore shipments for the first quarter, but maintained its fiscal 2019 production guidance. Woodside Petroleum and Oil Search were down 1 percent and 1.3 percent, respectively, at the end Friday's session.

Shares of Australian banks and financials declined. But this week, the biggest point of concern for investors including Mr Steven Leung, executive director at UOB Kay Hian (Hong Kong), has been the USA dollar, which hit a new high on Wednesday.

Under-fire wealth manager AMP has seen investors flee and shares tumble almost 25% on Thursday after announcing it would offload its Australian and New Zealand wealth protection and mature businesses to London-based Resolution Life for $3.3 billion.

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The dive in formerly high-flying tech stocks sent investors scampering to the safety of sovereign bonds, with yields in 10-year Treasuries falling the most since May to 3.11 percent.

OFFSHORE MARKET: US stock market closed down Wednesday, as fear that the economy is exiting the "peak" earnings environment helped by US tax cuts that were enacted late past year. UPS fell 3 per cent.

Investors also have been unnerved by comments from industrial companies saying trade conflicts have raised material costs.

In New York, the Dow Jones industrial average was down 396.17 points at 24,921.24.

The broad fundamentals of the market support this notion if the trading activity in the ASX200's most weighty constituents is assessed. All but three of its biggest companies are down this month, with last year's favorites Tencent Holdings Ltd., Sunny Optical Technology Group Co. and AAC Technologies Holdings Inc. losing more than 16 percent.

In Europe: Stoxx 50 +1.1% FTSE +0.6% CAC +1.6% DAX +1%.

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