Australia’s S&P/ASX 200 has reacted negatively to Donald Trump’s policy banning immigration policy from seven mainly Muslim countries.
The index is down 1.1 per cent at 5650 points, on track for its biggest one-day fall in two months. Overnight futures had indicated only a 0.2 per cent fall.
The broad-based fall in Australian shares comes amid slight risk aversion in global markets. US bonds are down 1 basis point, spot gold is up 0.2 per cent, US stock index futures are down 0.3 per cent and the US dollar is down 0.2 per cent.
Trump’s immigration policy as raised concern about the risk of sudden and extreme policies from the new President. However, despite condemnation from world leaders and corporate America, this recent policy change in itself is unlikely to have any economic effects.
“Investors will continue to be frustrated by the lack of clarity on the economic front as the president continues to focus on protectionism and immigrations,” says OANDA senior trader Stephen Innes.
“But I don’t believe this immigration stance is economically disruptive to the scale where it will dampen Wall Street’s current momentum and the dollar should regain solid ground quickly.”
Most of Asia is closed for Lunar New Year holidays, but volume on the S&P/ASX 200 is line with the 20-day average.
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