Australia

Australian shares are poised for a subdued open after Wall Street extended its losses overnight and Donald Trump's escalation of the trade war by imposing new tariffs on $200 billion worth of Chinese goods.

Mr Trump also warned that any retaliation by China to the latest attack would "immediately" trigger preparation for tariffs on another $US267 billion of imports. That would effectively cover every item imported into the US by China.

The 10 per cent tariff comes into effect on September 24, and will remain in place until the end of the year.

In futures trading, the SPI200 futures contract was down four points, or 0.06 per cent, to 6,179 points at 8.30am Sydney time. The Australian dollar is buying 71.79 US cents, from 71.60 US cents at Monday's close.

On Wall Street overnight, all three major US indexes were lower, with the tech-heavy Nasdaq posting its biggest percentage loss since late July.

The fall was led by declines in technology and consumer discretionaries ahead of Trump's pending tariff announcement, to which China has already pledged retaliation.

The Dow Jones Industrial Average fell 92.55 points, or 0.35 per cent, to 26,062.12, the S&P 500 lost 16.18 points, or 0.56 per cent, to 2888.8 and the Nasdaq Composite dropped 114.25 points, or 1.43 per cent, to 7895.79.

Consumer discretionary and technology were the biggest percentage losers on the S&P 500, falling 1.3 per cent and 1.4 per cent, respectively.

Locally, the RBA is set to release the minutes of its last interest rate meeting, potentially offering investors a clue about future decisions.

Full-year profits for adventure clothing retailer Kathmandu surged by almost a third to $NZ50.5 million ($46.3 million) after a big jump in Australian sales for the outdoor equipment retailer.

TPG Telecom has announced a 4.6 per cent drop in full-year profit to $369.9 million as it prepares for its merger with Vodafone, while second quarter house prices are expected to be released by the ABS.

Out today: ABS house prices second quarter, RBA September board meeting minutes

Asia

The Shanghai Composite Index fell 1.1 per cent to 2651.79 points, passing its 2016 post-crash low of 2655.66. The gauge is one of the worst performing in the world this year, down about 25 per cent from a January high, dogged by concern about China's economy and the trade war, among other factors.

Hong Kong, which hasn't fared much better, was dealt an extra blow by Typhoon Mangkhut over the weekend, which forced Macau casinos to close and cancelled hundreds of flights. The Hang Seng Index lost 1.3 per cent.

Europe

European shares recovered from a weak start on Monday and closed in positive territory after a choppy session.

The pan-European STOXX 600 reversed early losses to rise 0.1 per cent at the close, while Germany's DAX, home to large exporters and carmakers, was down 0.2 per cent.

North America

US stocks have fallen, led by declines in technology and consumer discretionary stocks as investors looked to President Donald Trump's announcement regarding tariffs on $US200 billion of Chinese imports.

All three major US indexes were lower, with the tech-heavy Nasdaq posting its biggest percentage loss since late-July.

Wall Street extended its losses ahead of the tariff announcement after Trump said the US's trade deficit with China was too big, stating "we can't do that anymore."

Earlier, China vowed that it will not play defence in the escalating trade dispute, adding further fuel to tensions as a new list of items subject to tariffs, including technology and consumer goods, was anticipated from Washington.

Consumer discretionary and technology were the biggest percentage losers on the S&P 500, falling 1.3 per cent and 1.4 per cent, respectively.

Amazon.com led consumer discretionary stocks lower, falling 3.2 per cent.

Apple has said the moves could hit a "wide range" of its products. The iPhone maker's shares were down 2.7 per cent, providing the biggest drag on the Dow, despite earlier reports that the

US would spare some of its products in the latest round of tariff actions.

All of the so-called FAANG group of momentum stocks closed down between 1.0 per cent and 3.9 per cent. Other FAANG stocks include Netflix, Facebook and Google-parent Alphabet.

 

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Morningstar with AAP, Reuters and Bloomberg 

Lex Hall is content editor, Morningstar Australia

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