ASX poised to fall after US technology sector took a hit

Stock Markets

Australian shares are poised to open lower today after stocks on Wall Street and Europe ended down on Monday as chipmakers took a hit amid the fallout from the blacklisting of China's Huawei Technologies. Last week saw the US Commerce Department adding Huawei and dozens of its affiliates to an "Entity List" that would greatly restrict its ability to buy components from US companies. The decision triggered a tech sell-off as a result of heightened investor fears of a widening trade war with the US and European technology sectors dragging their respective markets lower. Australian investors are expected to shift their attention to the RBA's monetary policy minutes which are scheduled to be released today, with market participants expected to focus on potential changes in language from the central bank.

Wall Street's major indexes closed in negative territory on Monday, with a tech-sell off dragging the indexes lower. The Dow Jones, S&P 500 and Nasdaq lost 84.1 (-0.33%), 19.3 (-0.67%) and 113.91 (-1.46%) points respectively.

The benchmark S&P/ASX200 index closed 110.8 (+1.74%) higher on Monday as investors reacted to the Coalition's unexpected federal election win. The index was bolstered by strong rebounds in the financial sector as investor concerns about the potential changes to franking credits were quelled.

ASX 200 futures are currently down 41 points.

Today's data releases: RBA board meeting minutes at 11.30am, Governor Lowe speech at 12.15pm; NZ credit card spending April; Euro zone consumer confidence May; US Fed chairman Powell speaks at an Atlanta Fed conference about 9am AEST, Existing home sales April

Commodities and Currencies

WTI and Brent crude are currently sitting at US$63.30 (+0.32%) and US$71.97 (-0.33%) per barrel respectively.

Iron ore prices are currently flat at US$101.71 a tonne.

The spot price of gold is currently flat at US$1277.61.

The AUD is currently up 0.22% at US69.23¢.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.