Australian stocks are on the back foot following the Malaysia Airlines crash in Ukraine, but the local market has so far avoided the selloffs seen in other parts of the world.
The local market is trading around a quarter of a per cent lower in response to the downing of flight MH17, which crashed early on Friday morning, Australian time, killing the nearly 300 people on board, including 27 Australians.
OptionsXpress market analyst Ben Le Brun said traders were concerned about possible fallout from the crash, amid accusations the plane was shot down by Russian separatists.
“This is, obviously, having a significant impact across markets,” he said.
“What we are seeing is fear coupled with uncertainty and that is a recipe for disaster.”
But Australian stocks have, so far, got off lightly compared to international markets. Japan’s Nikkei currently is down around 1.5 per cent while Wall Street’s Dow Jones and Germany’s DAX 30 lost around one per cent over night.
The Australian dollar is proving resilient, hovering around 93.50 US cents despite the international concerns.
At 1200 AEST on Friday, the local currency was trading at 93.52 US cents, down from 93.71 cents on Thursday.
In the US, the Dow Jones Industrial Average dropped almost one per cent, while the S&P 500 dropped more than one per cent and the Nasdaq fell 1.4 per cent.
Germany’s DAX 30 and Paris’ CAC 40 also lost more than one per cent, while London’s FTSE 100 was down 0.68 per cent.
Mr Weston said traders would be nervous about the geopolitical fall-out amid accusations the plane was shot down by Russian separatists.
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“If you are a trader, are you going to want to be holding positions going into this weekend when the situation could potentially escalate?” he said.
The uncertainty has seen a rally in the bond market as investors look for safe haven assets.
“People are going to be piling into the bond market,” he said.
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