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Australian Market Declines

The Australian stock market is declining on Wednesday after two straight days of gains and despite the positive cues overnight from Wall Street. Worries about rising U.S.-China tensions offset optimism about the reopening of economies.

Bloomberg reported that the Trump administration is considering a range of economic sanctions on Chinese officials and companies over the situation in Hong Kong.

The benchmark S&P/ASX 200 Index is losing 28.90 points or 0.50 percent to 5,751.10, after touching a low of 5,713.90 earlier. The broader All Ordinaries Index is lower by 27.10 points or 0.46 percent to 5,862.80. Australian markets closed sharply higher on Tuesday.

Among the major miners, Fortescue Metals is tumbling more than 4 percent, Rio Tinto is lower by more than 3 percent and BHP is losing almost 3 percent.

Gold miners are sharply lower after gold prices declined overnight. Evolution Mining is losing more than 6 percent and Newcrest Mining is falling almost 5 percent.

Meanwhile, the big four banks are sharply higher. National Australia Bank, Westpac and ANZ Banking are higher in a range of 3.9 percent to 4.7 percent, while Commonwealth Bank is advancing almost 2 percent.

National Australia Bank is raising A$750 million through a share repurchase plan in addition to its earlier target of A$500 million, for a total of A$1.25 billion. The bank noted that the capital raised through the offer will help it to manage through different scenarios related to the COVID-19 pandemic.

In the oil sector, Santos is rising almost 2 percent and Woodside Petroleum is adding more than 1 percent, while Oil Search is down 0.3 percent after crude oil prices gained more than 3 percent overnight.

Shares of vitamins producer Blackmores are in a trading halt ahead of a capital raising.

On the economic front, Australia will today see first-quarter numbers for construction work completed.

In the currency market, the Australian dollar is higher against the U.S. dollar on Wednesday. The local unit was quoted at $0.6635, compared to Tuesday's close of $0.6591.

On Wall Street, stocks closed higher on Tuesday, fueled by optimism for a possible vaccine for the Covid-19 virus as U.S. biotech company Novavax said it started the first human study of its experimental coronavirus vaccine and that it expects initial results on safety and immune responses in July. There was also a positive reaction to news that several states are continuing to relax lockdown restrictions and reopening more businesses.

The Dow surged 529.95 points or 2.17 percent to finish at 24,995.11, while the Nasdaq added 15.63 points or 0.17 percent to 9,340.22 and the S&P 500 rose 36.32 points or 1.23 percent to end at 2,991.77.

The major European markets also ended on a firm note on Tuesday. The U.K.'s FTSE 100 gained 1.24 percent, Germany's DAX advanced 1 percent and France's CAC 40 surged up 1.46 percent.

Crude oil prices moved higher on Tuesday amid rising optimism that relaxation in lockdown restrictions in several countries across the world will help fuel energy demand. Also, with OPEC and its allies committed to a significant reduction in crude outputs, concerns about demand-supply mismatch appear to be easing now. WTI crude for July rose $1.10 or about 3.3 percent at $34.35 a barrel.

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