ASX 200 drops for third day as US trade fears rattle market, gold trumps global uncertainty

Gold has blasted through global uncertainty with no signs of slowing down, as the Australian market waits to see if the situation between the US and Greenland de-escalates.

The ASX 200 dropped for the third straight day, as the local sharemarket was weighed down over fears of renewed trade tensions between the US and Europe.

Wall Street fell sharply amid Donald Trump’s latest moves on Greenland, and the top 200 companies in Australia followed suit, recording a 0.37 per cent decline to close at 8782.90.

The All Ordinaries index fell 0.33 per cent to finish trading at 9108.6.

The Australian dollar is doing better at 67.52 US cents, paving the way for it to trade towards 69 cents if it keeps rising.

Gold ended the day up 0.02 per cent at $4857, as it heads towards $5000 an ounce.

IG market analyst Tony Sycamore said it was not surprising the index was down given the chaos on Wall Street overnight.

He said the market would wait and see what comes from Trump’s Davos speech and an emergency EU summit in Brussels on Thursday night.

“Obviously the market is hoping for a circuit breaker to stop the escalation in trade tests that we’ve seen this week,” he said.

“The Japanese bond market was also a source of great volatility on Tuesday, but has quietened down a little bit.

“Overall we’re in a little bit of a lull now.”

Eight of the 11 sectors finished in the red, led by Information Technology down 2.5 per cent and consumer discretionary at 2.14 per cent.

Materials continued its hot run with a 2.5 per cent lift, with utilities and energy also finishing in the green.

Wednesday’s biggest winners were Emerald Resources NL, up more than 13.2 per cent to close at $7.96, Paladin which rose 13.1 to $13.17 and Westgold Resources which recorded a 9.6 per cent rise to $7.53.

Droneshield was the sharpest faller, losing 8.86 per cent to $4.32.

The big four banks all closed in the red, ANZ and Commonwealth Bank falling more than 2 per cent, NAB shedding 1.62 per cent and Westpac down 1.24 per cent, while BHP gained 1.46 per cent to $48.48.