The Australian stock market gave up early gains and is declining on Tuesday following the negative cues overnight from Wall Street amid fears of an intensifying U.S>-China trade war after the U.S. crackdown on Chinese telecom giant Huawei. Tech stocks are among the leading decliners.
Investors are also cautious as they look ahead to the release of the minutes from the Reserve Bank of Australia's May 7 monetary policy meeting later in the day.
The benchmark S&P/ASX 200 Index is losing 27.20 points or 0.42 percent to 6,448.90, after rising to a high of 6,492.30 in early trades. The broader All Ordinaries Index is lower by 31.00 points or 0.47 percent to 6,533.70. On Monday, Australian shares hit their highest level since December 2007 following the ruling conservative party's surprise victory in the country's federal election.
In the tech space, Afterpay Touch Group is lower by more than 4 percent, WiseTech Global is declining more than 2 percent and Altium is lower by more than 1 percent.
The major miners are also weak. Fortescue Metals is lower by more than 2 percent, Rio Tinto is declining more than 1 percent, and BHP Group is down almost 1 percent.
Oil stocks are lower despite an increase in crude oil prices overnight. Oil Search is losing almost 1 percent, while Santos is down 0.7 percent and Woodside Petroleum is lower by 0.6 percent.
Gold miners are mixed, even as gold prices rose overnight. Evolution Mining is advancing more than 1 percent, while Newcrest Mining is down 0.3 percent.
Bucking the trend, the big four banks are mostly higher after the prudential regulator APRA proposed dropping the requirements for banks to use a minimum 7 percent interest rate to assess customers' ability to meet their mortgage repayments. ANZ Banking, National Australia Bank and Westpac are higher in a range of 1.2 percent to 1.6 percent, while Commonwealth Bank is down 0.2 percent.
ANZ said it has appointed Ken Adams, who has been a senior partner at Herbert Smith Freehills, as its top lawyer to replace Bob Santamaria, who is retiring.
James Hardie Industries reported a 57 percent surge in full-year profit on higher revenues, but cut its final dividend. The construction materials company's shares are rising 0.4 percent.
OFX Group reported a 12 percent increase in its full-year underlying profit, while net profit declined 5.8 percent. The foreign exchange provider's shares are gaining almost 11 percent.
On the economic front, the Reserve Bank of Australia will release the minutes from its May 7 monetary policy meeting today. At the meeting, the RBA kept its benchmark lending rate unexpectedly on hold at 1.50 percent, but downgraded its growth and inflation forecasts to suggest subdued price pressures across the economy.
In the currency market, the Australian dollar is lower against the U.S dollar on Tuesday. The local currency was quoted at $0.6920, down from $0.6926 on Monday.
On Wall Street, stocks closed lower on Monday, led by tech stocks, amid ongoing concerns about the escalating U.S.-China trade dispute after Google suspended some of its business with Chinese tech giant Huawei. Google has cut Huawei off from business involving the transfer of hardware, software and technical services, complying with an order by President Donald Trump blocking the sale or transfer of U.S. technology to Huawei.
The Nasdaq plunged 113.91 points or 1.5 percent to 7,702.38, while the Dow fell 84.10 points or 0.3 percent to 25,679.90 and the S&P 500 slid 19.30 points or 0.7 percent to 2,840.23.
The major European markets all moved to the downside on Monday. While the U.K'.s FTSE 100 Index slid by 0.5 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.5 percent and 1.6 percent, respectively.
Crude oil prices rose on Monday as prospects of a likely fall in supply amid an escalation in tensions in the Middle East and on OPEC's indication that it is likely to maintain production cuts for some more time. WTI crude for June ended up $0.34 or 0.54 percent at $63.10 a barrel on the New York Mercantile Exchange.
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