Australian share market rebound on trade war pause between US, Canada and Mexico

Massive losses on the Australian stock market on Monday have started to unwind after trade tensions between the US and its neighbours eased overnight.

President Donald Trump has agreed to hold off the start of punishing 25 per cent tariffs on all imports from Canada and Mexico after striking deals with the leaders of both countries to shore up security along the US borders.

A 10 per cent tariff on good from China remains in place.

Wall Street trimmed an early 2 per cent loss as news of the deal with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum broke.

The claw-back buoyed Aussie investors, who ran the S&P-ASX200 up 0.7 per cent after the first 30 minutes of trade in Tuesday after a 1.8 per cent rout in the previous session.

All sectors were back in the green, led by utilities, miners, real estate, financial and health care stocks.

Iron ore majors BHP added almost one per cent but Fortescue and Rio Tinto recorded gains of more than 1.7 per cent.

Lithium players Mineral Resources and Pilbara Minerals were among the top-five winners on the S&P-ASX200, each jumping more than 3.5 per cent. It was a different story for Rio’s Arcadium Lithium, which topped the loser’s board with a loss of 2 per cent.

Most gold miners also bounced as the precious metal hit a fresh all-time high.

Northern Star Resources was up 0.3 per cent, Evolution Mining jumped one per cent, as did Bellevue Gold.

Bullion advanced as much as 1.2 per cent to $US2830.74 an ounce, surpassing the previous record reached Friday, before paring gains after Mr Trump agreed to delay the tariffs.

“These tariffs create a strong tailwind for gold,” Bank of Montreal analysts wrote in a note. “Not only because of their inherent inflationary effects but also as the USA’s increasingly hawkish foreign policy may accelerate de-dollarisation plans.”