Via Bloomberg
According to Bloomberg Australian equity investors are far more likely to focus on the improving domestic economy of the country and its strong COVID-19 response than the row on increasing tension between Beijing and Canberra.
Treasury Wine Estates
The last few days have seen Treasury Wine Estates knocked around by China's decision to impose anti-dumping duties on a listed Australian Company. However, the market has remained positive and came close to erasing its 2020 losses last week amid rising coronavirus optimism.
Financials
Australia's benchmark, the ASX200,has around 30% of its total made up by financials. The hope of an improving economy, a decent COVID-19 response, and global growth hopes have seen financial surge more than 17% in November. In addition to 30% gain in energy stocks has helped the ASX reach its best monthly gain on record.
Materials
Materials are the second biggest weight on the ASX index and a large amount of that is tied up in iron ore majors like BHP Group, Rio Tinto and Fortescue Metals none of which are likely to be subject to duties in the same way that Treasury Wine has been. Whitehaven coal generates only 1.7% of its revenue from China.
The tensions between Beijing and Canberra have been bubbling away now for a few months since Australia's PM wanted an independent enquiry into the outbreak of COVID-19. This resulted in Beijing demonstrating that it can impact Australia's economy if it wanted to. However, despite the tariffs imposed and threatened the general market reaction has been one of indifference. The consensus view is that this dispute will blow over. So, until evidence to the contrary, the market reaction seems to be to ignore the spat.
