US tariffs drive ASX losses following seven month low

Gold stocks were among the few bright spots from Thursday’s ASX trading, as the local share market lost more ground, narrowly avoiding deepening a seven-month low.

Investors have flocked to gold as a safe haven amid Donald Trump’s tariff upheaval, as Commonwealth Bank tips the Aussie dollar will “spend time” below US60 cents this year.

Australian gold companies were one of the few leaders for the ASX on Thursday. Real estate – with a 0.04 per cent gain – was the only one of the 11 sectors in the green.

The S&P/ASX200 closed down 0.48 per cent to 7,749.1, losing 37.1 points.

The loss marks 15 days of declines in the past 19 sessions, and narrowly avoided deepening the seven-month low set on Wednesday.

Ground was made early on Thursday, until Morgan Stanley downgraded its Australian market rating, forecasting underperformance versus global markets based on higher valuations and trade exposure.

“We recommend investors generally reduce exposure to high relative valuation markets and tilt toward markets with domestic and/or idiosyncratic drivers, while looking for further areas of leadership transition and portfolio reallocation,” Morgan Stanley strategist Daniel Blake said.

The relative safe haven of gold was an attractive option for traders on Thursday.

Among the local bourse’s 200 largest firms, nine of the top ten biggest gainers were gold explorers and miners. Ora Banda Mining led with a 9.9 per cent gain to $1.05. Westgold Resources, Bellevue Gold and Spartan Resources made respective 8.2 per cent, 5.8 per cent and 5.6 per cent gains.

Casting aside this silver (or gold) lining, 10 of the 11 sectors finished in the red.

Consumer staples, consumer discretionaries and financials were the biggest losers.

Discretionary giant Wesfarmers lost 0.83 per cent to close at $69.08, following CommBank household spending data showing a small 0.2 per cent fall in February.

The consumer watchdog is also “informally” looking at a gas deal involving a Wesfarmer subsidiaries.

There were positive consumer sentiment numbers from Westpac earlier in the week, nonetheless luxury clothes retailer Cettire (down 3.83 per cent), Baby Bunting (down 1.7 per cent), Myer (down 3.9 per cent), and Kogan (down 3.59 per cent) all fell.

While copper miners rallied on a five-month price peak, coal miners copped the opposite. Coking coal prices fell 3 per cent on the back of the Trump aluminium and steel tariff confirmations.

Macquarie also cut its ratings of a series of coal miners because of the soft demand.

New Hope Coal lost 8.5 per cent to $3.73, and Whitehaven Coal fell 5.8 per cent to $5.54. Yancoal set its dividend cut off Thursday morning, and shares plummeted 12.5 per cent, to finish at $5.29.

The Aussie dollar is trading at US63 cents, but with room to fall to a five-year low, CommBank says.

“We retain our guidance that AUD/USD has further downside because ‘peak tariff’ has not been reached,” CommBank foreign exchange economist Kristina Clifton said.

“We expect AUD/USD can spend some time below 0.6000 this year.”