It has been a very volatile day of trade for the S&P/ASX 200 Index (ASX: XJO). After a number of ups and downs, in early afternoon trade the benchmark index is up slightly to 5,945.6 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

The Altium Limited (ASX: ALU) share price is down almost 3% to $32.71. Investors have been selling this electronic design software company’s shares this week after it warned that it is likely to fall short of consensus estimates in FY 2020. The latter part of the financial year, which is historically a strong period for sales, has been impacted by a second wave of coronavirus.

The Austal Limited (ASX: ASB) share price is down 4.5% to $3.51. This morning analysts at Ord Minnett retained their lighten rating but lifted their price target on this shipbuilder’s shares to $2.75. Although it sees the U.S. government’s investment in its U.S. operations as a positive, it doesn’t appear to see it as a game changer.

The Challenger Ltd (ASX: CGF) share price has tumbled 8% lower to $4.89. This morning the annuities company’s shares returned from a trading halt after the successful completion of its $270 million institutional placement. These funds were raised at $4.89 per new share, which represents an 8.1% discount to its last close price of $5.32. Challenger also announced that it has no plans to pay a final dividend in FY 2020.

The Mesoblast limited (ASX: MSB) share price is down 6.5% to $3.46. This is despite there being no news out of the biotech company. However, its shares have been very strong performers over the last three months. Since this time in March the Mesoblast share price has risen over 200%. This could have led to a spot of profit taking from investors today.

More reading

• ASX 200 flat: Westpac tumbles, Woolworths reveals strong sales growth, Challenger sinks
• Challenger share price sinks 7% lower following equity raising and final dividend update
• 5 things to watch on the ASX 200 on Tuesday
• Is the Challenger share price a buy?
• ASX Stock of the Day: Austal share price surges 9% on US Government agreement

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium and Austal Limited. The Motley Fool Australia owns shares of and has recommended Challenger Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Our market slumped on reports that US and China may be headed for a new trade war. But some ASX stocks will be hit harder than others if the speculation is accurate.

The S&P/ASX 200 Index (Index:^AXJO) surrendered all of its morning gains and fell 0.8% in late morning trade.

Investors got spooked after US President Donald Trump’s key trade advisor Peter Navarro is reported to have declared the Sino-US trade deal “over”, according to Bloomberg.

New US-China trade war upon us?

Navarro broke the bad news to Fox News during an interview when he was asked about the China deal.

The news sent US stock futures tumbling as well with the Dow Jones Industrial Average tipped to fall over 1% when trade resumes later tonight.

It’s unclear whether the trade agreement between the two sides is really over as Navarro’s comments comes days after Chinese officials recommitted to the deal during a meeting with US Secretary of State Michael Pompeo in Hawaii.

China increased the amount of US agriculture products it will buy to US$36.5 billion from US$24 billion under phase one of the deal, reported the South China Morning Post.

Take news with pinch of salt

Investors should treat the news with some scepticism, in my opinion. If the trade deal was off, I believe it will be boldly stated on Trump’s Twitter feed and not just to Fox News.

I can’t help but feel Navarro’s comment was meant to play to Trump’s support base after his disastrous re-election campaign rally in Tulsa, Oklahoma.

Further, Trump needs China to step up its buying program to win over key agriculture producing states.

The Chinese also may not want to upset Trump. Not because they aren’t up for a trade fight, but because I think they rather deal with Trump given his knack for striking deals and willingness to compromise to advance his cause.

Any other president might be less flexible and more driven by ideology.

ASX stocks worst hit by US-China trade war

But if I am wrong and trade tensions start to escalate again, this will be bad news for local and global investors – especially as we are trying to control the COVID-19 fallout.

While all sectors on the ASX 200 have slipped into the red after Navarro’s remarks were published, some are likely to suffer more.

One that will be in the firing line is global logistics group Brambles Limited (ASX: BXB). A trade war will cut global trade and impact on the group’s bottom line.

Another to suffer is alcoholic beverage group Treasury Wine Estates Ltd (ASX: TWE). The group has significant exposure to both the US and China.

Its wines are also impacted by discretionary spend, so if consumer sentiment is hurt by trade tensions, Treasury Wine’s sales will suffer too.

A drop in economic output from a trade war will also put pressure on base metals – more so than bulks. Base metals are used in industrial production, and lower demand for goods means less demand for commodities like copper and nickel.

That will be bad news for the likes of South32 Ltd (ASX: S32) and IGO Ltd (ASX: IGO).

More reading

• ASX 200 flat: Westpac tumbles, Woolworths reveals strong sales growth, Challenger sinks
• The A2 Milk share price is up 27% in 2020, but is it time to buy?
• These ASX stocks might be a better option than Carsales.Com
• How to try and beat the market with ASX shares
• Is it time to buy BHP shares right now?

Motley Fool contributor Brendon Lau owns shares of Brambles Limited and South32 Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has given back its strong morning gains and is trading flat at lunch. At the time of writing the benchmark index is at 5,944.3 points.

Here’s what has been happening on the market today:

Bank shares weigh on ASX 200.

The big four banks have taken a tumble today and are weighing heavily on the ASX 200. All four banks are in the red at lunch, with the Westpac Banking Corp (ASX: WBC) share price the worst performer. Australia’s oldest bank is down 1.3% at the time of writing. One broker that would see this as a buying opportunity is Morgans. It has just named Westpac as its top pick in the group.

Woolworths update.

The Woolworths Group Ltd (ASX: WOW) share price is trading lower at lunch after the release of an update this morning. The conglomerate announced major investments to its supply chain which it ultimately expects to lead to lower costs in the future. It also revealed strong fourth quarter sales growth across the business and its guidance for FY 2020. Woolworths currently expects to report earnings before interest and tax (post-AASB 16 and before significant items) of $3,200 million to $3,250 million.

Challenger shares tumble.

The Challenger Ltd (ASX: CGF) share price has crashed 9% lower after returning from its trading halt. This morning the annuities company announced the successful completion of its $270 million institutional placement. These funds were raised at $4.89 per new share, which represents an 8.1% discount to its last close price of $5.32. Challenger also announced that it has no plans to pay a final dividend in FY 2020.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Tuesday has been the Western Areas Ltd (ASX: WSA) share price with a 13% gain. This follows a very positive drilling update this morning. The worst performer is the Challenger share price with its 9% decline. Investors appear to be disappointed with its decision to raise capital and cancel its final dividend.

More reading

• Why Altium, Austal, Challenger, & Mesoblast shares are tumbling lower
• Renewed US-China trade war puts these ASX 200 stocks in the firing line
• Why AMP, FlexiGroup, Harvey Norman, & Qube shares are charging higher
• Should you buy ANZ, CBA, NAB, or Westpac? Here’s what this broker thinks
• Woolworths share price higher on major supply chain update and FY 2020 guidance

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post ASX 200 flat: Westpac tumbles, Woolworths reveals strong sales growth, Challenger sinks appeared first on Motley Fool Australia.

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