The Australian share market is expected to open lower as the local currency fell against the US dollar to its lowest level in a decade.
The SPI200 futures contract was down 15 points, or 0.22 per cent, at 6,712.0 at 0800 AEST, suggesting an early dip for the benchmark S&P/ASX200 on Friday.
On Wall Street, the Dow Jones Industrial Average finished down 1.05 per cent, the S&P 500 was down 0.90 per cent and the tech-heavy Nasdaq Composite was down 0.79 per cent.
The Bank of England kept interest rates on hold overnight but lowered its growth forecasts while US President Donald Trump said Chinese imports would face an additional 10 per cent tariff from September despite calling recent trade talks in Shanghai “constructive”.
The local currency fell sharply overnight to its lowest levels since 2009 against the US dollar. The Aussie dollar is buying 67.98 US cents from 68.45 US cents on Thursday.
Apart from a January 3 flash-crash that lasted just minutes, the last time the Aussie dollar was buying less than 68.50 US cents, which is where it was in the depths of the global financial crisis in early 2009.
The S&P/ASX200 index, meanwhile, closed down 23.7 points on Thursday, or 0.35 per cent, to 6,788.9. The broader All Ordinaries was down 24.8 points, or 0.36 per cent, to 6,871.9.
“There was a little bit of disappointment, given the confusion on Jerome Powell’s press conference,” said Bell Direct equities analyst Julia Lee.
The US Federal Reserve cut interest rates by 25 basis points on Thursday but Mr Powell, the Fed chairman, warned that it wasn’t “the beginning of a long series of rate cuts,” surprising many traders who thought it was.
“He wasn’t as aggressive as markets were anticipating,” Ms Lee said. US markets lost more than a percentage point on the news.
In Australia, most sectors were lower except for property trusts, industrials and consumer discretionary shares. The mining sector was the biggest loser, down 1.5 per cent.
BHP fell 1.2 per cent to $40.26, Fortescue Metals was down 2.3 per cent to $8.14 and South32 was down 1.3 per cent to $3.10.
Rio Tinto was down 1.1 per cent to $97.71 and after the markets closed the mining giant announced it would pay $US3.5 billion ($A5.1 billion) in normal and special dividends to shareholders.
Gold prices dropped 1.3 per cent to $US1,406 on Mr Powell’s comments, sending Newcrest Mining down 3.9 per cent to $34.20 and Evolution down 3.8 per cent to $4.83.
Northern Star was down 7.3 per cent to $12.07 after it said it would spend a record $76 million on exploration in the current financial year.
The big banks were mostly up, with Westpac up 0.5 per cent to $28.80, ANZ up 0.4 per cent to $28.01 and NAB up 0.5 per cent to $28.64.
The Commonweath Bank was the outlier, falling 0.5 per cent to $81.92. Janus Henderson was the biggest loser among ASX200 components, falling 12.2 per cent to $27.93 after the London-based asset management group said it had experienced $US9.8 billion ($A14.3 billion) in outflows in the second quarter.
Nufarm was up 3.1 per cent to $5.03 after strategic partner Sumitomo Chemical Company invested $97.5 million in the agricultural chemicals company.
PolyNovo was up 9.4 per cent to $1.75 after the Melbourne-based company said sales of its polymer wrap to treat wounds and burns were tracking significantly up this fiscal year. PolyNovo shares have nearly tripled so far this year.
Pro Medicus shares were up eight per cent to $33.25 after S&P Dow Jones Indices announced the diagnostic imaging company would replace DuluxGroup in the ASX200, as Dulux is being acquired by Nippon Paint.