US stocks recover from early plunge to finish flat

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The Australian share market has opened lower as the heavyweight financial sector fell almost one per cent.

The benchmark S&P/ASX200 index was down 32.4 points, or 0.50 per cent, to 6,487.1 points at 1030 AEST on Thursday, while the broader All Ordinaries was down 28.9 points, or 0.44 per cent, to 6,559.6 points.

Mining giant BHP was up 0.19 per cent to $36.82 while Rio Tinto, which is trading ex-dividend, was down 2.58 per cent to $87.19 and Fortescue was up 0.99 per cent to $7.12. Decisions by Asian central banks to cut interest rates and weak German data “reminded investors that economic growth in several other regions of the world remain at risk as the US and China trade dispute drags on,” said CFRA strategist Lindsey Bell in a note.

Banking shares were big losers as the weakening US interest rate outlook crimps the profit outlook. JPMorgan Chase, Wells Fargo and Bank of America all lost around two per cent or more. The gains came mostly after the Reserve Bank of New Zealand cut interest rates by 50 basis points, which was double what traders had been expecting and led many to assume the Reserve Bank of Australia was more likely to cut rates next month.

Consumer stocks, telecoms, utilities and property trusts were all up between 1.4 and 1.6 per cent while energy share and tech stocks were the only sectors to lose ground.

 

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