SYDNEY, NSW, Australia - A sharp deterioration in China-Australian relations took a toll on Australia's stock market on Thursday.
While other markets mostly rallied, Australian stocks and its currency came under heavy pressure after China cut a vital diplomatic bond between the two countries.
"Based on the current attitude of the Australian Commonwealth Government toward China-Australia cooperation, the National Development and Reform Commission of the People's Republic of China decides to indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue," the commission said in a statement.
Compounding Australia's woes, Sydney, the country's biggest city announced went into panic mode over the discovery of two new Covid-19 cases. The New South Wales premier ordered masks be reimposed on all public transport, in hotels, and aged care facilities, while drinkers at pubs can no longer stand while at the bar, they have to be seated. New Zealand as well announced a 48-hour ban on travel to and from Sydney.
The Australian All Ordinaries on the ASX (Australian Stock Exchange) dropped 51.00 points or 0.69 percent to close at 7,293.20.
Elsewhere, in Japan, the Nikkei 225 was on fire. The key index jumped 497.73 points or 1.73 percent to 29,310.14.
China's Shanghai Composite was flat after adding just 5.58 points or 0.16 percent to 3,441.28.
In Hong Kong, the Hang Seng advanced 219.46 points or 0.77 percent to 28,637.46.
On foreign exchange markets, the Australian dollar took a dive to 0.7700 cents before recovering to end the day in Sydney around 0.7752.
The U.S. dollar was steady with little movement except against the commodity currencies. The Canadian dollar rose strongly to 1.2255. The New Zealand dollar rose 0.7219.
The euro was changing hands at 1.2021. The British pound was unchanged at 1.3903. The Japanese yen eased a touch to 109.29. The Canadian dollar was firm at 0.9121.