Australia

Escalating fears of a trade war between the US and other leading economies have rocked global sentiment and set the Australian share market on course for a sharp fall.

At 8.30am (AEST), the Australian futures index was down 56 at 6099. The Australian dollar has edged down, buying 74.14 US cents.

Global equity markets have taken a battering: London's FTSE 100 was down 2.2 per cent, Germany's DAX fell 2.5 per cent and China’s markets lost more than one per cent.

Losses were widespread but technology stocks suffered the most as the US Treasury Department was drafting curbs that would block firms with at least 25 per cent Chinese ownership from buying US tech firms, a government official said on Sunday.

The Australian equities market on Monday lost ground after losses in the finance sector following Commonwealth Bank's announcement it will spin off its wealth management business.

The benchmark S&P/ASX200 index closed down 0.24 per cent at 6210.4 points, while the broader All Ordinaries fell 0.21 per cent to 6308.7 points.

Out today: Reserve Bank of Australia head of payments policy Tony Richards will address an Australian Business Economists function on cryptocurrencies in Sydney.

The ANZ-Roy Morgan Consumer Confidence weekly survey is due out.

Asia

In Asia, Japan's Nikkei share average dropped as sellers targeted large caps including Fast Retailing and SoftBank as well as defensive stocks, while the mining sector outperformed after oil prices jumped on Friday.

Sharp Corp stumbled 5.1 per cent after the company said it will issue 78.4 million shares via a public offering.

The Nikkei fell 0.8 per cent to 22,338.15.

Hong Kong stocks fell to a six-month low, dragged down by tech shares due to the US plans to limit on Chinese investment in US technology firms.

The Hang Seng index fell 1.3 per cent, to 28,961.39, while the China Enterprises Index lost 1.2 per cent, to 11,208.90.

China stocks gave up early gains to close lower, as an expected reserve requirement ratio (RRR) cut was largely offset by lingering trade war fears, and as a weakening yuan pushed lower real estate and airline shares.

The blue-chip CSI300 index fell 1.3 per cent to 3,560.48, while the Shanghai Composite Index slid 1.1 per cent to 2859.34.

Europe

British shares suffered their worst trading day since February as a global sell-off caused by the escalating trade dispute.

The FTSE 100 closed down 2.2 per cent, with financials, energy and material stocks weighing on the British blue chip index.

Losses accelerated across Europe after trading began on Wall Street and Donald Trump announced plans to bar Chinese companies from investing in US technology firms and block additional technology exports.

Cruise operator Carnival's shares took the biggest hit, down 11.1 per cent as it cut its earnings forecast.

Heavyweights BP and Royal Dutch Shell were down 3.4 per cent and 2.6 per cent as oil prices gave back Friday's gains made after an output agreement between major oil exporters.

The pan-European STOXX 600 index dropped 2 per cent, while Frankfurt's DAX lost 2.5 per cent to 12,270.33.

North America

Trade fears have battered US stocks, driving benchmark indexes lower by about 2 per cent to their steepest losses in more than two months.

Losses were widespread but technology stocks suffered the most, with the Nasdaq diving 2.5 per cent, as the US Treasury Department was drafting curbs that would block firms with at least 25 per cent Chinese ownership from buying US tech firms, a government official said on Sunday.

US Treasury Secretary Steven Mnuchin on Monday tweeted that the restrictions would apply not specifically to China but "to all countries that are trying to steal our technology".

The S&P technology index dropped 3.0 per cent, set for its biggest one-day plunge in nearly three months. The Philadelphia Semiconductor index dropped 3.7 per cent as shares of chipmakers, which derive much of their revenue from China, took a hit.

Harley-Davidson Inc shares tumbled 7.1 per cent after the company said it would move production of motorcycles shipped to the EU to its international facilities. It forecast that tariffs would cost the company $90 million to $100 million a year.

The Dow Jones Industrial Average fell 1.33 per cent, to 24,252.80, the S&P 500 lost 1.37 per cent, to 2717.07 and the Nasdaq Composite dropped 2.09 per cent, to 7532.01.

 

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Morningstar with AAP

Lex Hall is a Morningstar content editor, based in Sydney.

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