Australian shares are set to extend their losses on Tuesday after threats by United States President Donald Trump to impose new tariffs on trading parties undermined global share markets.
A drop of 0.4% by the ASX 200 index at the start of trading is on the cards, based on Australian Securities Exchange (ASX) futures dealings, given the reaction to Trump saying a 10% tariff would be imposed on eight European countries from 1 February.
The benchmark’s March share price index contract was quoted 31 points below the previous settlement at 8,813 points at the time of writing.
Share prices around the world fell in the wake of the threat, which is linked to Trump’s plan to take over Greenland, although in the United States, cash equity markets were closed for the Martin Luther King Jr. Day public holiday.
However, S&P 500 and Nasdaq futures prices dropped more than 1.2%, contributing to the negative mood.
"There is obviously a response (in financial markets) to the new tariff threats," Forvis Mazars Chief Economist George Lagarias was quoted as saying in a Reuters report.
"It's highly likely that the White House will use the threat of tariffs consistently, even when deals have previously been agreed."
The Australian market had closed down on Monday with the S&P/ASX 200 index losing 0.3% to 8,874.5 points as eight of the 11 sectors ended in the red.
Companies to watch today include BHP, which has provided an operational review, and HUB24, which issued a market update.
In fixed interest markets, Australian Government bond yields lifted with two-year rates rising 0.02% to 4.062% and 10-year rates also up by 0.02% at 4.754%.
