It’s another ugly day for the ASX as trade tensions are driving investors away from risk assets with every sector on the market losing ground.
The S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index crashed in late morning trade as the tentative trade war truce between the US and China looks to be on shaky ground following the arrest of Huawei’s chief financial officer Meng Wanzhou, who’s also the daughter of the company’s politically connected founder.
Meng was arrested in Canada and faces extradition to the US to face charges on breaking the Iran sanctions and could face up to 30 years behind bars.
Chinese leaders are incensed by arrest and ASX investors can expect a further step-up in market volatility if tensions between the two largest economies escalate.
Stocks exposed to global economic growth are hit hard today and the three worst performing shares on the ASX 200 at the time of writing are:
- Emeco Holdings Limited (ASX:EHL) – EHL’s share price is the biggest faller on the ASX 200 with a 7.5% crash to $2.04. Souring sentiment towards NYSE-listed Caterpillar Inc. is a drag on the ASX-listed earthmoving equipment rental company as the sector is seen to be leveraged to economic activity.
Emeco Holdings (ASX: EHL) Chart
- Inghams Group Ltd (ASX:ING) – The ING share price isn’t far behind Emeco’s share price fall with Inghams’ stock diving 7.3% to $4.22 as the shares in the poultry supplier trade without shareholder entitlement to its $125 million (or 33 cents per share) capital return. If you adjusted for the cash-back, the Ingham share price would be trading flat to Friday’s close.
Inghams Group (ASX: ING) Chart
- IOOF Holdings Limited (ASX:IFL) – The IFL share price took a further 6.7% hit to $4.29. If it closes the day at this level, it would represent its lowest price in nearly a decade. This morning’s loss was triggered by a wave of broker downgrades and the replacement of its CEO and chairman following APRA’s surprise court action against IOOF’s senior executives. The IOOF share price is likely to stay on the backfoot for a while yet!
IOOF Holdings (ASX: IFL) Chart
On the flipside, and by no coincidence, the best performing ASX shares this morning are gold miners as investors bet that the precious metal would be one of the few safe havens to park their capital.
The top three performers on the S&P/ASX 200 are the Northern Star Resources Ltd (ASX: NST) share price, Saracen Mineral Holdings Limited (ASX: SAR) share price and Regis Resources Limited (ASX: RRL) share price as they gain more than 3% each.
Norther Star Resources (SAX: NST)
But these aren’t the only stocks that could outperform if our market remains under pressure. Market Matters have identified another group of stocks that could find good support in a risk-off environment.