ASX opens flat amid US-China tension

Shares have started trade nearly flat on the Australian market although the financial, energy and materials sectors were marginally higher.

The S&P/ASX200 benchmark index was lower by 0.7 points, or 0.01 per cent, at 5549.7 points after the first 15 minutes of trade on Thursday.

The All Ordinaries index was 0.6 points, or 0.01 per cent lower, at 5661.5.

Property was the strongest sector early, up 1.03 per cent.

The heavyweight financial sector was next best, up 0.4 per cent, as were the materials and energy sectors, which were higher by 0.13 and 0.12 per cent respectively.

Consumer staples was tracking the worst, down 1.08 per cent.

Wesfarmers has outlined writedowns of up to $650 million in its full year accounts and store closures after completing the first phase of a review into its underperforming Target business.

The uncertain start for the ASX indexes comes after US indices finished trading poorly overnight. 

President Donald Trump said the US would react strongly if China imposed national security laws for Hong Kong, and US Secretary of State Mike Pompeo criticised Beijing’s handling of the coronavirus outbreak.

A Chinese official said the country will not flinch from any escalation in tensions.

As a result, the Dow Jones Industrial Average fell 0.41 per cent, the S&P 500 lost 0.78 per cent and the Nasdaq Composite dropped 0.97 per cent.

Australia’s relations with China have also been strained after it lobbied for an international investigation into the origins of the coronavirus pandemic.

The Australian dollar was buying 65.63 US cents at 1015 AEST, down from 65.71 US cents at the close of trade on Thursday.

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