Australian shares drop as Trump rally loses steam

The local share market has slipped for the first time since Donald Trump's inauguration amid fears of what the US president's promised tariffs might do for trade with China.

The benchmark S&P/ASX200 index on Thursday dropped 51 points, or 0.61 per cent, to 8,378.7 while the broader All Ordinaries dropped 51.4 points, or 0.59 per cent, to 8,629.1.

IG market analyst Tony Sycamore said while the ASX's tech stocks had mirrored an overnight rally on Wall Street, the local sector only constituted a small weighting within the ASX and its gains were overshadowed by declines in major mining and banking stocks.

"The weakness in mining stocks is attributed to Trump's mention of a 10 per cent tariff on China yesterday," Mr Sycamore said.

While that's significantly less than the 60 per cent levy suggested during Mr Trump's campaign, it still provides enough reason for investors to continue avoiding the sector, Mr Sycamore said.

The mining sector dropped 1.5 per cent, with BHP falling 1.7 per cent to $39.12, Fortescue retreating 2.2 per cent to $18.62 and Rio Tinto declining 1.4 per cent to $118.

With gold dipping to $US2,752 an ounce, goldminer Evolution fell 3.9 per cent and Newmont retreated 1.9 per cent.

The big four banks had a mostly quiet day, with NAB down 0.3 per cent to $39.16, and the other three making moves of less than 0.1 per cent.

Praemium grew 11.8 per cent to a two-year high of 85 cents after the wealth management platform reported it had $62.1 billion funds under administration at year end, up 29 per cent from a year ago.

Rival Netwealth climbed 1.7 per cent to $29.90 after reporting it had $101.6 billion in funds under administration following $4.5 billion in fourth-quarter inflows, a record for the company.

In the consumer discretionary sector, Myer Holdings climbed 6.1 per cent to 96 cents and Premier Investments dipped 0.7 per cent to $26.85 after shareholders in both companies approved Myer's acquisition of Premier's five clothing store brands.

The all-scrip transaction will close on Sunday, with Premier shareholders receiving shares totalling 51.5 per cent of the new Myer.

Santos had climbed 0.6 per cent after reporting it made $US430 million in fourth-quarter free cash flow and $1.9 billion for the full year.

In health care, Cyclopharm advanced 11.8 per cent to a one-year high of $2.27 after announcing a new agreement with a US health care provider would allow for the use of Cyclopharm's lung imaging agent Technegas in up to 169 nuclear medicine departments.

The Australian dollar meanwhile was close to a one-month high against its US counterpart, buying 62.72 US cents, from 62.66 US cents at close of business Wednesday.

Bitcoin was trading for $A163,502, from $A167,724 on Wednesday.

ON THE ASX:

* The benchmark S&P/ASX200 index on Thursday dropped 51.1 points, or 0.61 per cent, to 8,378.7

* The broader All Ordinaries fell 51.4 points, or 0.59 per cent, at 8,629.1

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 62.71 US cents, from 62.65 at close of business Wednesday

* 98.27 Japanese yen, from 97.64 yen

* 60.27 euro cents, from 60.15 euro cents

* 50.94 British pence, from 50.76 pence

* 110.71 NZ cents, from 110.68 NZ cents