Headline indices of the Australian share market edged lower on Wednesday, 28 November 2018, despite Wall Street gain overnight as investors treading cautiously ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week, with losses to mining stocks have wiped out gains from energy and healthcare players. In afternoon trade, the benchmark S&P/ASX200 index declined 3.28 points, or 0.06%, to 5,725 points, while the broader All Ordinaries index shed 3.77 points, or 0.06%, to 5,799 points.
Global developments influenced trading in local market today. Federal Reserve Vice Chairman Richard Clarida backed gradual rate hikes ahead of Jerome Powell's speech on Wednesday. Clarida said risks to the U.S. economy are less skewed to the downside, while St. Louis Fed President James Bullard was more cautious, telling that officials must monitor possible “cracks” in the U.S. recovery and that growth is going to slow in 2019 and 2020. The debate on the pace of monetary policy tightening in the U.S. next year has intensified this week ahead of Powell's speech that will be parsed for any hints on prospects for a pause in rate increases next year.
Investors are looking ahead to the Group of 20 summit beginning Friday when President Donald Trump and Chinese President Xi Jinping are expected to meet and discuss trade issues. The summit will be watched closely for how relations between both countries develop, in addition to further news surrounding Sino-US trade. China's main goal at the G20 meeting is to get the United States to refrain from raising the tariffs in January. Trump is open to a deal with China but is ready to impose more tariffs if the upcoming talks don't yield progress.
Petroleum-linked shares were mostly higher even as crude oil prices edged lower overnight. Woodside Petroleum fell almost 1% and Oil Search added 0.2%, while Santos was lower by 0.6%.
Metals and mining stocks were lower, with BHP down 1.5% and RIO slide 2.8% while Fortescue Metals rose more than 1%. Gold miners were also weaker with Saracen Minerals (SAR) 9% lower and Newcrest Mining (NCM) declining 1.3%.
Financial stocks edged up. Commonwealth Bank, Westpac and National Australia Bank were higher by 0.1% to 0.2%, while ANZ Banking was down 0.3%.
In economic news, the Australian Bureau of Statistics said that the total value of construction work done in Australia was down a seasonally adjusted 2.8% on quarter in the third quarter of 2018, coming in at A$53.143 billion. That missed expectations for an increase of 1% following the 1.6% gain in the three months prior.
CURRENCY: Australian Dollar, seen as a proxy for China-related trades, eased against greenback and other major currencies on Wednesday. The Australian dollar was quoted at $0.7229, down from $0.7234 on Tuesday.
OFFSHORE MARKET NEWS: Wall Street stocks closed higher on Tuesday. The Dow Jones Industrial Average added 108.49 points, or 0.4%, to 24,748.73. The broad-based S&P 500 rose 8.72 points, or 0.3%, to 2,682.17, while the tech-rich Nasdaq Composite Index inched up 0.85 points to 7,082.80.
The major European markets moved to the downside on Tuesday. The German DAX Index fell by 0.4%. The U.K.'s FTSE 100 Index and the French CAC 40 Index dipped by 0.3% and 0.2%, respectively.