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Category: Stockmarket / Currency / Futures / Markets

US shares post biggest one-day fall since September

Wednesday, 22 Mar 2017 05:59:24 | Lucia Stein

Wall Street's run came to a shuddering halt, with the biggest one day fall in six months. (Jessica Rinaldi: Reuters)

Stocks in the United States have fallen sharply overnight, with investors nervous ahead of a key vote on a Republican proposed healthcare bill.

Markets at 8:00am (AEDT):

  • ASX SPI 200 futures -0.8pc to 5,710
  • AUD: 76.93 US cents, 61.61 British pence, 85.98 Japanese yen, 71.15 euro cents, $NZ1.09
  • US: S&P 500 -1.24pc to 2,344, Dow Jones -1.14pc to 20,668, Nasdaq -1.83pc to 5,793
  • Europe: Euro Stoxx -0.41pc to 365.73, FTSE -0.69pc to 7,378, DAX -0.75pc to 11,962
  • Commodities: Gold +0.93pc to $US1,244.80/ounce, Brent crude oil -1.6pc to $US50.81/barrel

The legislation is expected to be debated on the house floor later this week, but there are concerns that Republicans do not have enough votes to pass the bill.

The struggle to push through the healthcare overhaul has made investors wary about the Trump administration's ability to deliver tax cuts and infrastructure spending.

As a Westpac analyst note observed, "risk aversion" took hold, leading to the largest fall in the S&P500 since September 2016, with a fall of well over 1 per cent.

"While [there] hasn't been any key economy reports nor especially enlightening Federal [Reserve] news, it's perhaps the lack of news out of Washington that's seeing some risk money come out of the market again," NAB economist David de Garis wrote in an analyst note.

"Some further unwinding of the Trump reflation trade is afoot."

Bank of America and Goldman Sachs were among the worst performers in the session, as investors continued to adjust their expectations following signals from the Fed last week that interest rates would increase at a more gradual pace.

European stocks also slipped on the back of the uncertainty in the US, overshadowing gains in banking stocks on the continent.

Banking stocks, particularly in France, rose on the back of a strong performance from independent centrist Emmanuel Macron in yesterday's televised French presidential debate.

Locally, the market is on track to follow Wall Street's steep falls.

The Australian dollar is just below 77 US cents this morning, despite a session where there was "diminished appetite" for the US dollar, an ANZ analyst note observed.

"The Yen [was] the strongest in the session, up 0.65 per cent at 111.8, with gains also for the euro, Sterling, and the Swiss franc," the bank noted.

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