The Australian sharemarket followed Wall Street lower on Tuesday, after the Dow Jones suffered its biggest sell-off since before the US election as concerns over the Trump administration's isolationist policies grew.
The ASX fell 0.7 per cent to 5620.9 in a broad-based sell-off that saw all sectors in the red, while the broader All Ordinaries lost 0.7 per cent to 5675.0.
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S&P; 500 suffers biggest drop of 2017
Investors worry that a curb on immigration ordered by Donald Trump is a reminder that some of the US president's policies are not market-friendly.
It was a similar story in the region. While Chinese markets were closed due to the Lunar New Year holidays, Korea's Kospi shed half a per cent while the Singapore Straits Times index fell 1 per cent. Japan's Nikkei was also down 1.3 per cent, after the Bank of Japan's decision to keep rates on hold.
ANZ economist Felicity Emmett said that balancing the likely impact of US President Donald Trump's pro-growth policies with his more isolationist tendencies was tricky for investors.
"[It] certainly doesn't feel like we are entering a backdrop where you can set your stock portfolio, relax and ride out these trends.
"It is still unclear how a more isolationist US could affect markets. And then there is the issue that on any given day a tweet or executive order could derail well-thought out plans. It does appear as though markets are increasingly reflecting that unease."
Leading the local market lower were big miners BHP and Rio Tinto, which fell and 2.6 per cent and 1.7 per cent respectively. Fellow miner Fortescue bucked the trend, up 2.8 per cent, after telling the market it'll meet its iron ore production guidance and possibly exceed it while continuing to cut operating costs.
Gold miners followed the spot price higher, with Newcrest Mining rising 0.4 per cent. The big four banks shed between 0.6 per cent and 0.9 per cent.
Profit downgrades saw investors dump stocks across a range of sectors. Mineral sands explorer Iluka Resources closed 3.1 per cent lower after informing the market it would made a net loss between $220 million and $230 million in 2016. The day's biggest loser was Virtus Health, the fertility clinic operator, which slumped 17.7 per cent after it said its IVF volumes were weaker than expected.
Insurer QBE reacted to more positive news, trading 1.2 per cent higher after Monday's (since denied) expectations of a takeover offer. Graincorp shares rose during the day but ended up just about level - 0.1 per cent up - after it sold its 60 per cent share in Australia's largest flour supplier, Allied Mills, to Private Equity Partners for $190 million. The day's biggest gainer was Asaleo Care, up 6.3 per cent. Bellamy's also had a good day, rising 5 per cent.
Meanwhile, Sirtex Medical didn't trade on Tuesday, with its shares being put into a trading halt in advance of legal proceedings brought against it for alleged breaches of its continuous disclosure obligations.
Stock watch: Aconex
Software company Aconex shed another 2.6 per cent on Tuesday, on top of Monday's 45.1 per cent fall, after it downgraded its full-year profit forecast on lower-than-expected sales in the UK and US. Co-founder and chief executive Leigh Jasper said the downgrade was due to uncertainty around Brexit and Donald Trump. But by Tuesday, most analysts had more or less shrugged off the downgrade, retaining their buy ratings on expectations the stock would significantly rise from current levels. Of the analysts tracked by Bloomberg, 60 per cent retain a buy rating, 30 per cent have the stock as a 'hold' while only 10 per cent have it as a 'sell'.. Citi's analysis says the market reaction was "excessive". But Deutsche Bank, which maintained its 'hold' rating, said the downgrade raised questions about Aconex's engagement with its clients and that its confidence in management was "severely dented".
Market movers
Aussie dollar
The Australian dollar held near two-month highs but remained stuck below the US76¢ level, despite strong business conditions data. The Aussie was fetching US75.66¢ in late trade, having been trapped in a tight US75¢-US76¢ band over the past 10 sessions. But the dollar is up about 5 per cent in January, making it one of the best performing major currencies in the world. The gains have come on the back of a sagging greenback, with investors growing increasingly leery about US President Donald Trump's economic and social agenda.
Iron ore
Iron ore will cap a fourth monthly gain to post the longest run of advances since 2012 on resilient demand for cargoes in China. The bulk commodity's spot price rallied to as much as $US83.65 a tonne in mid-January, the highest price in more than two years, and was last at $US83.34, prior to the Chinese New Year celebrations. While Fortescue has noted that China's economic policies and infrastructure initiatives are supporting consumption, many analysts are predicting lower prices this year due to over-abundant supply.
Gold
Gold rose back above $US1200 an ounce on increased safe haven demand as US President Donald Trump's tough stance on immigration rattled global markets, with prices finding further support from a weaker US dollar. Traders were also awaiting the Federal Reserve's two-day meeting on monetary policy starting on Tuesday for cues on US interest rate hikes. Fears that the US travel bans could affect the tech and energy sectors, posing growth challenges if the ban is prolonged had led to a rise in the precious metail, traders said.
Bank of Japan
The Bank of Japan kept monetary policy steady and roughly maintained its upbeat price forecasts, signalling a steady economic recovery will help accelerate inflation towards its 2 per cent target without additional stimulus. The BoJ raised its economic growth outlook for financial year 2017 to 1.5 per cent (from 1.3 per cent), maintained the 0.1 per cent interest it charges on a portion of the excess reserves that financial institutions park with the central bank and kept its yield target for 10-year bonds around 0 per cent.