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Australian shares have recovered slightly from steep losses to be down 0.6 per cent in midday trade, with miners weighing on the market and on concerns around the defeat of Donald Trump's healthcare package.
Miners were hampered by falls in commodity prices, with Chinese steel and iron ore futures falling for a fourth consecutive session, with commodities overall posting their biggest weekly drop in three months according to Reuters.
The major miners BHP Billiton and Rio Tinto led the falls, losing 3 per cent and 1.9 per cent respectively.
The ASX 200 fell almost 1 per cent early on before recovering slightly. It was down 0.6 per cent to 5,722 by 12:23pm (AEDT).
That followed from a volatile session on Wall Street on Friday, which saw bourses finish slightly lower after Republicans pulled the plug on President Donald Trump's health legislation due to a lack of support.
The legislation was thwarted by two factions of the Republicans from the centre and far right, and house speaker Paul Ryan said former president Barack Obama's healthcare law would remain in place "for the foreseeable future".
US equity futures were at a six-week low.
"Frankly I'm not in the camp that says 'nothing to see here move along', when it comes to the implications of the failure to get the Obamacare repeal through the US House of Representatives," said Greg McKenna, chief market strategist at AxiTrader.
"If healthcare was complex, then so too will tax be with many moving parts and competing interests."
Analysts say the political focus will now shift towards tax reform, which Mr Trump promised during his election and is the main game for Wall Street investors.
The ASX 200 has been on an upward trajectory since President Donald Trump's surprise election victory in November, mirroring moves on Wall Street.
The index hit 5,833 on February 16, its highest level since May 2015 and has been hovering around the 5,700-5,800 level since.
Investors have piled into equities globally, optimistic about Mr Trump's plans for billions of dollars in infrastructure spending which would stimulate the economy and spur growth.
Among financials, the big four banks all fell, with Westpac down 0.6 per cent, while Commonwealth Bank slipped 0.4 per cent.
The real estate sector was the only major group that bucked the trend to rise, buoyed by Stockland, which jumped 1.4 per cent, while Scentre Group and Westfield both added 0.7 per cent.
The Australian dollar is mostly flat, fetching 76.2 US cents. The US dollar is at a two-month low against major currencies as investors sold out of the greenback on concerns around fiscal stimulus after the defeat of Mr Trump's Obamacare repeal.
"This was the first major attempt by the administration to reform government and its miserable failure exposes the limits of President Trump's negotiating skills as well as divisions within his own party," wrote Rodrigo Catril, currency strategist at NAB in a note to clients.
Topics: stockmarket, markets, currency, business-economics-and-finance, australia